Posted on Thursday 10 May 2018 by Ulster Business
Deloitte's Matt McCullough and Peter Allen
You might assume that, under a cloud of Brexit uncertainty and more than a year without a functioning government at Stormont, the investment community’s view of Northern Ireland would not be particularly favourable.
But the number of deals involving local companies which have taken place in the past 12 months and the number of businesses successfully attracting investment suggests that the opposite is actually true, according to Peter Allen, corporate finance partner at Deloitte in Belfast.
“Deal activity, both M&A and debt raising, is happening despite Brexit and the impasse at Stormont. In what are uncertain times, the interest being shown in Northern Ireland companies should be viewed as a real good news story,” he says.
“NI businesses that have made it through the last recession are generally robust and lean organisations. They have strong routes to market, they are likely to be international businesses who export and they have a flexible platform upon which to grow.”
Having recently acted as lead advisers on the largest Northern Ireland private equity deal in recent memory – the £60m investment in Lowe Rental by London family office fund Perwyn – Deloitte’s team is well placed to assess the lie of the land.
Deloitte provided advisory and debt advisory services to the management shareholders and investor MML in the transaction and found there was strong interest from the international private equity community in Lowe because of its strong growth prospects in overseas markets.
Lowe’s chief executive Rodney Lowry, said the transaction was “executed with precision” and praised the “professionalism and expertise of the entire Deloitte team”.
There is, says Peter, a lot of similar activity in the pipeline and as a result Deloitte has invested significantly in its corporate finance and M&A capabilities, bringing together London, Dublin and Northern Ireland expertise to provide a different type of offer to the market.
This includes partner Anya Cummins, who started her career in the firm’s corporate finance team in Dublin and re-joined Deloitte in 2016 after spending five years with sell-side specialist boutique Cavendish Corporate Finance in London. She specialises in mergers, acquisitions, disposals and equity capital raising.
“We’re seeing very strong M&A activity and appetite for investment in Northern Ireland. 2017 was a busy year for M&A across the island of Ireland and we expect to see continued strong activity for the rest of this year and into 2019,” Anya says.
“This is driven by international corporate buyers seeking acquisition opportunities and an active private equity market. Both Dublin and London funds are competing for investment opportunities in high growth businesses with international expansion capabilities, led by strong management teams.”
Complementing Anya’s experience is recently appointed M&A partner Jan Fitzell who will jointly lead the firm’s M&A services offering, advising companies on their acquisition, disposal and capital raising strategies. He was previously director of IBI in Dublin for 14 years.
They add to the corporate finance expertise Peter Allen has built in Belfast over the last eight years as Northern Ireland has transitioned out of recession. In addition to a strong restructuring practice the team has grown to include debt, equity, M&A and forensic advisory services.
At the forefront of building connections across Northern Ireland and advising on debt and equity fundraising deals is Matt McCullough, senior manager in the corporate finance team.
Neal Shanks has also joined that team to lead on debt advisory, bringing 15 years’ experience of the banking sector. He is currently advising on several fundraising deals for significant local trading businesses as well as major development sites including Giant’s Park and the Sirocco site in Belfast.
“Deloitte is doing something different. We’ve brought it all together by augmenting our teams on the ground in Belfast and Dublin with people who have gained that London experience of the investment process and know what each type of deal requires,” says Peter.
Matt has been the driving force behind a number of deals to help growing businesses in the past year, including the £2.5m equity investment in cafe chain Bob & Berts by the Business Growth Fund (BGF) and the £1.5m debt and mezzanine financing package that enabled We Are Vertigo to launch Ireland’s first indoor skydiving centre.
Bob & Berts currently has 16 coffee shops but having secured the investment from BGF now intends to open an additional 30 stores across Northern Ireland, the Republic and Scotland over the next four years, which could result in as many as 600 new jobs being created.
Having previously opened the first indoor trampoline park in Northern Ireland, We Are Vertigo demonstrated their ambitions were even higher with the £1.5m investment to open the island’s first indoor skydiving centre, creating 20 jobs in the process.
“Most of the companies I speak to are looking at opportunities for growth,” Matt says. “For a lot of them the biggest challenge is accessing the right sort of funding to realise their plans. Deloitte acts as the gateway to a range of investment options for the private sector.”
A lot of the companies Matt meets are growing businesses who are potential candidates for Deloitte’s Best Managed Companies programme or are already part of the programme. He says there is particular growth activity and investor interest in sectors such as technology and manufacturing, but the attention isn’t limited to those industries.
“There is undoubtedly interest in Northern Ireland from funders and investors at the moment, which represents a strong opportunity for businesses to market themselves,” Matt says.
Speaking about We Are Vertigo’s success, Peter said the business “identified a market need and addressed it with a really good product”, adding that it “continues to innovate, and has a fantastic management team”.
When M&A in Northern Ireland is discussed it is often hot sectors such as fintech and cyber security that grab the headlines. But Peter says that a number of the best growth stories are happening in traditional industries such as manufacturing, food & agri and hospitality and leisure and these stories are not confined to Belfast.
Deloitte, which now has close to 800 employees in Northern Ireland, has also recognised that what companies here want is not limited to M&A and has invested accordingly in its expertise in debt advisory, customs & VAT, corporate tax and forensics.
This benefits the business, but it is also in keeping with Deloitte’s commitment to helping bring investment in to NI, which is evidenced by the firm’s significant support for the regeneration plans of Belfast City Council including being a lead sponsor of the Belfast delegation that attended the MIPIM property conference.
“Deloitte has confidence in Northern Ireland as a great place to do business and a hotbed of talent and we’re committed to playing our part to bring investment and attention to the region,” Peter says.
“Deloitte’s own expansion and the breadth of expertise within the business demonstrates our determination to invest in our economy and the scale of Northern Ireland’s ambition into the future.”