Cross-border M&a

Cross-border M&A activity has recently been at record levels and the outlook remains buoyant.

Overseas acquirers continue to be attracted by a strong domestic market place and a highly skilled labour pool supported by world-class educational institutions. The UK also enjoys a position as being regarded as a strategic bridgehead to the European market, in particular by US and Far East acquirers. The cultural proximity including a common language between the UK and US, the most prominent source of overseas acquirers, further supports the attractiveness of the UK market. In the short term, the weakening Sterling against other major currencies, particularly the US Dollar, is creating additional impetus to consider UK targets. The North East has seen a number of cross-border

deals in recent times which suggest that the region is seen as attractive and performing particularly well. At Cavu Corporate Finance we recently completed the sale of property technology company Kykloud to US-based Accruent. Accruent was attracted to Kykloud mainly for their market-leading technology, but also saw the acquisition as a means of attacking the European markets. Other recent trade deals include German waste management company Remondis acquiring JBT Waste Services as a first step in creating a fullservice waste company for a strong UK market, and French pharmaceutical business Novacap acquiring Chemoxy.

In addition to trade buyers, there is also growing interest from overseas financial investors, who are particularly attracted to the strong North East technology sector. US-based venture capital firm Greycroft invested in digital marketing business Performance Horizon, e-tailer END Clothing secured investment from Index Ventures and FTV Capital invested in financial services firm True Potential. There is a positive outlook for cross-border M&A activity continuing as overseas trade and private equity funds remain keen to invest in good quality assets in a fundamentally strong UK market place.