2020 has left an indelible footprint on North West businesses. COVID-19 has not discriminated against one sector over another; companies from across a breadth of industries have faced exceptional challenges and, in many cases, shown sheer grit and determination to navigate through national and local lockdowns that have affected the region since March.
But, despite the undeniable pressures being placed on the region’s businesses, there are segments of the market that are prime for growth – entrepreneurial companies that are seizing opportunities, or realising that in times of adversity now is the time not to contract, or stand still, but to grow.
The investment market could not be better placed to welcome those businesses into the fold. According to the BVCA’s annual Report on Investment Activity, UK private equity and venture capital investment reached £22.33 billion in 2019, an increase of £1.6 billion on the previous year. A total of 1,530 companies received backing in 2019, an increase of 15% on the 2018 figures, with the North West taking a 9.6% share. Stand out PE deals in 2020 we have acted on include acting for YFM on its £5.6m VCT investment into lead generation platform Unbiased, acting for Maven on its £2m VCT investment into web and email archiving business Mirrorweb and acting for Northedge on its disposal of East Coast Concepts.
The appetite from investors is clearly there for those business owners looking to de-risk, execute ambitious growth strategies, capitalise on consolidation opportunities, or implement a succession plan ahead of expected tax rises next year. So, if there’s plenty of cash to support buyouts for those looking to exit, and development capital deals for entrepreneurs looking to grow their business, what do businesses need to consider when choosing private equity?
Timing – is your company ready for expansion? Is there a suitable amount of depth and breadth for the senior management team to accelerate growth? Understanding when you have achieved sufficient scale and trading is key.
Business case – positioning yourself in the strongest light is essential to attract potential private equity investment. Make it clear what makes you stand out from the crowd; highlight your USPs; and ensure you have the data and management information to back up your claims.
Cultural fit and strategic aims – the most successful private equity investments are based on strong relationships. Finding the right partner can often hinge on achieving a cultural fit and the team understanding your strategic aims. Trust is essential in creating a sustainable and fruitful partnership.
Insight and market experience – a successful relationship will provide your business with wider support from investors and non-executive directors, the benefits of shared experiences and market insight, as well as tapping into portfolio contacts.
The North West market is awash with innovative businesses looking to achieve growth, even in the context of 2020, whether that’s by gaining market share, launching new products, or through consolidation. If you’re an ambitious business ready to take the next step on your growth journey and you would like to understand why now might be the right time to engage with private equity investors, join our event – in partnership with YFM Private Equity and accountants, Hurst – on 12 November 2020. For more information, visit https://www.hurst.co.uk/events/ma-update-private-equity-solution-right-you#event-webform