< PreviousMERGERS AND ACQUISITIONSThe Current State of theM&A Market for Small andMedium Sized BusinessesNeil Gray, Corporate Finance PartnerStreets Chartered AccountantsThe Mergers and Acquisitions market isvery active and will remain so for theforeseeable future. Acquirers want to keepgrowing and expanding into new marketsto leverage their own infrastructure andon the other side, business ownerscontinue to view a sale as a way to fundretirement and gain access to bettertechnology or customers. The availabilityof good businesses for sale are however,getting slimmer, and while I do not seeany material reduction in M&A activity forthe time being, I wonder how muchlonger it will last. If you have established that an acquisition is the best wayforward, the first key step is to develop a one-page AcquisitionProfile, describing the characteristics that a target company mustpossess to fit your strategic goals. In particular, the following areasshould be addressed:* Nature of products and services;* Minimum levels of turnover and profitability;* Minimum market share and growth prospects;* Types of customers and nature of relationships;* Location and geographic coverage;* Opportunity for rationalisation and integration;* Management continuity.The Acquisition Profile should also address the type of deal youconsider appropriate, for example:* Minimum and maximum deal values;* Form of consideration: cash and/or shares;* Availability of loan notes as an alternative; and* Desirability of earn-outs or deferred consideration.There are many purchasing pitfalls that can trap the unwary.People sell their homes or cars for obvious reasons, but thereasons for selling a business are less apparent, unless there issomething wrong. It is important to remember that there are nobargains. If a business is going cheap, there is probably a goodreason. Never forget that the seller knows a lot more about thebusiness than the buyer. Getting help in analysing the true value ofthe business and understanding exactly what you are buying iscrucial and professional advice should be sought at a very earlystage. So whether you are buying or selling, my tips are:* Use the best advisers you can afford, a good adviser costs younothing;* Take references on the people you are dealing with;* Never take your eye off the ball of your own business if you arelooking to sell it;* Generally trade buyers are good purchasers of businesses* Do not assume any deal will complete as many transactions arefalling at the last minute.You may only buy or sell a business once in your lifetime, makesure you get it right. The benefits of getting it right could well bebig, but if you get it wrong…Neil Gray is Corporate Finance Partner at Streets CharteredAccountants, a top 40 UK accountancy firm. Telephone0845 8800320, email info@streetsweb.co.uk or visitwww.streetsweb.co.ukBUSINESSLINKMULTI-PLATFORM MARKETINGIN PRINTBusiness Link is theregion’s leadingbusinesspublication,reaching decisionmakersthroughout the region.Often imitated but never equalled.ON LINEWith over 200,000visitors per monthvisiting our website,Business Link gets youradvertising message infront of the peoplethat count.FACE TO FACEBusiness Link hostsmany corporateevents bringingtogether theregion’s topbusinesses todiscuss hot topicsand provide valuablenetwork opportunities.GAIN AN UNRIVALLED ADVANTAGEThe region’s leading companies and mostprestigious brands promote themselvesthrough Business Link.You can too, just call Angela Cooper orSam Trott on 01472 310310 foran informal chat.www.blmforum.netLinkingbusinesstogether10Business Link www.blmforum.net06-10_Layout 1 03/05/2016 10:10 Page 5Business Link 11www.blmforum.netSomething to say? Write to: Business Link Magazine, Armstrong House, Armstrong Street, Grimsby,North East Lincolnshire DN31 2QE or email: letters@blmgroup.co.ukReaders’LETTERSReaders’LETTERSLittle sympathyfor GP’s Dear Sir,Whilst I have every sympathyfor Junior Doctors in our country,I find it hard to sympathise withGP’s many of whom now earn inexcess of £120,000.I recall a few years ago sharinga dinner table on a cruise shipwith a senior doctor whoexplained the government madea massive faux pas by tellingthem they could have 50% payrises if they hit certain targets –these targets then transpired tobe lower than what they werealready achieving so the GP’scouldn’t believe their luck.How can they now complain?Perhaps GP partners should doas the rest of us do in businessand reduce their takings fromtheir businesses to pay for moremembers of staff, includingsalaried doctors. Then when thebusiness picks up they can revertback to their £120,000 perannum. K SimpsonHullBrexit mis-information Dear Sir,I must take issue with K Sleight’s comments in your recent issue of Business Link asno one can accurately predict the outcome of leaving the EU, given that no country hasever taken such action. Personally I didn’t think Mervyn King had made up his mind just yet on which way hemight vote – most people argue they we should do so because of the immediate costsaving which amounts to some £13 bn. But let’s not lose sight of the fact that the UKreceived £4.5 and fail to take into account the financial advantages such as free tradeand inward investment. There is also the question of whether the brightest and best candidates will still beattracted to the UK if we come out and what effect this might have on the labour pool.Don’t get me wrong, I don’t subscribe to the theory that that to even consider this isto bring about some kind of apocalypse and I am appalled that the government shouldspend tax payers money on printing pro-EU leaflets. I am equally appalled over theinhumane deal the EU just made with Turkey. What we need is more facts to help us all make an educated decision. K StanleyLeeds Oh for a knighthoodDear Sir,It seems company law in the UK need a radical overhaul. First Brantano goes intoliquidation and is subsequently allowed to buy back the stores (only those that were mostprofitable to them though) and presumably disposing of a shed load of debt in the process.Next, we discover a Director of an ailing retail chain is said to have extracted some £500million from the coffers despite having only paid £200m for it. Although questions are raised over how dividends paid can exceed the profit made thepunishment appears to have been being recommended for a Knighthood. It doesn’t stop there though as four years later, Cameron awards him a job to reviewgovernment spending and procurement, only to discover what we already knew – there’s a lotof waste! Is there anyone in the land that couldn’t have told Cameron that?T BarnetLincoln 11_Layout 1 03/05/2016 10:11 Page 112Business Link www.blmforum.netCOMMERCIAL PROPERTYTaking advantage of and repurposingexisting buildings is a means ofsecuring office space that’s quite unlikeany other. The advantages mean thatnew industrial or commercial propertycan be made available without incurringthe expense, time and disruptioninvolved in a new build. Althoughmotivation might be financial in nature,opting for a refurbished building orfacility is a significantly less carbonintensive option. Such is the caseacross our region, where developersare meeting the demand for quality,central office space for businesses toexpand or for start-ups to get a leg-up.Between repurposing existingproperty and new builds are a fewalternatives which offer all the benefitsof both options. Repurposed shippingcontainers have provided work spacefor writers to artisan food companies.Because of their design, adaptabilityand abundance, they present an idealsolution for many sole traders or forpop-up experiences in urban areas. ForSMEs, single shipping containers aren’table to provide the space needed, butconstructing a new build from multipleshipping containers means thatbusinesses can enjoy the freedoms of anew build, whilst also tapping into amore circular economy with a costeffective and more sustainable solution.The Krynkl project in Shalesmoor,Sheffield from architectural practiceCoda Studios is a unique example ofthis idea in action. Work is underway for the mixed usedevelopment which will be madeentirely from recycled shippingcontainers and will offer low cost officespace and meeting rooms for start-upbusinesses, as well as a gym, café anda rooftop bar incorporating an outdoorterrace. The £500,000 design, which isthe first of its type outside of London, isbeing funded by South Yorkshire-basedRecycle, refurbish, regenerate Recycled building structures and refurbished materials areushering in a new business infrastructure that is attractingexciting start-ups in our region. PHOTO: KRYNKL 12-15_Layout 1 03/05/2016 10:13 Page 1The Thornbury CentreCONFERENCEFACILITIES,MEETINGROOMSANDOFFICESPACEAVAILABLEConvenient for Leeds and Bradfordwww.thornburycentre.com says: “This really is one of the mostexciting and unusual projects we haveworked on and one that will bring awhole new level of interest andexcitement to an area of Sheffield thatis ripe for regeneration andwww.blmforum.netBusiness Link 13private investment fund A ShadeGreener Money, and has also won thesupport of Sheffield Council. The shipping containers which will beused in the construction have beenshipped to the UK from China and, as ofwriting, are being made ready for theShalesmoor site. Building in this wayoffers a very low cost solution, as well asan efficient and flexible constructionsolution. It also means utilising the shapeof the shipping containers, meaning thatindividual units as small as 150 squarefoot are available, making it ideal forcompanies that are just starting out.Coda Managing Director David Cross15 ÁPHOTO: SHUTTERSTOCK.COM/GYN903712-15_Layout 1 03/05/2016 10:13 Page 2ArmstronghouseOffering a prime position in Grimsby, Armstrong House onArmstrong Street is ideally located. Close to the ports ofGrimsby and Immingham, motorway links and the town centre,off-street parking is also available for all staff and visitors,meaning it’s convenient too. Our spacious, welcoming officesare located on the ground floor and are both secure and CCTV-monitored, giving you the ultimate peace of mind.At Armstrong House, the flexible in/out terms of contractmean confidence when it comes to affordability and with a rangeof office sizes there are opportunities for all types of business. Ifyou require virtual office services, prices start from just £15 permonth. For more information, or to discuss your office requirements,give Scotts Property a call today on 01472 267000 and askabout Armstrong House.Last remaining office suitesPrime location in GrimsbySuperb Location -- Close to the ports of Grimsby &Immingham- Great motorwaylinks- Close to the town centreSecure off street parkingHigh speed internet availabilityEasy in/out termsA range of affordable office sizes33333Armstrong House, Armstrong Street,Grimsby DN31 2QETel: (01472) 310301 • Email: s.fisher@blmgroup.co.ukwww.shutterstock.com/terekhov igorwww.shutterstock.com/Yentafern12-15_Layout 1 03/05/2016 10:13 Page 3www.shutterstock.com/Yentafernwww.blmforum.netCOMMERCIAL PROPERTYBusiness Link 15development.”As part of its core ethos, the Krynklteam are offering free office units for 12months to Sheffield’s most innovativestart-ups. The first company to benefitin this way is city events managementcompany, Freshly Squeezed. Mr Crosssays: “We met Freshly Squeezed and itwas obvious that they understood whatKrynkl was all about and that theyshould be part of the complex.“This is all part of our spirit of socialresponsibility, supporting fledgingbusinesses and it is something we willbe taking forwards as we develop twomore Krynkl sites in the region over thenext few months.”Modular construction is also tappinginto refurbishment, offering businessesa means of reducing their carbonfootprint without sacrificing quality offunctionality. East Yorkshire-basedForemans Relocatable Building Systems– part of the Portakabin Group – hasrecently invested £1.5 million in itsbuilding stock to meet the growingdemand for its services. It now has thelargest selection of previously-ownedPortakabin buildings indicating the levelof interest businesses have in recycledmodular construction. Mike Williams, Managing Director ofForemans, says: “Our approach to re-using Portakabin buildings combines allthe advantages of modular construction– speed and reduced disruption – withthe additional benefits of exceptionalcost efficiency, lead times reduced upto 30 per cent compared to newmodular construction, and greatersustainability to help our customersreduce their carbon footprint.”The modular buildings arereconfigured to the exact specificationfor each product, and are fitted withcompletely new fixtures and fittings,creating quality accommodation forpermanent or interim applications. Using refurbished Portakabinbuildings can fulfil purpose-designedbuilding specifications, while alsobenefiting from the sustainable aspectof re-using an existing buildingstructure, reducing lead times as well ascarbon emissions. The corporate landscape across ourregion is populated by start-upssearching for ideal office space. Manyof these companies are looking tointegrate their values to theirworkspace, meaning that sustainable,minimal disruption and cost are allimportant factors. Consequently, therehas been an upsurge in the number ofrefurbished properties available tobusinesses, but also in finding uniqueapproaches to design and construction.Utilising existing building materials suchas modular buildings and shippingcontainers mean that bold andrevolutionary work spaces can beconstructed to facilitate the expandingneeds of SMEs and start-ups andcontinue to make our region a hub ofcreativity and excellence. PHOTO: SHUTTERSTOCK.COM/FOOTTOO12-15_Layout 1 03/05/2016 10:13 Page 416Business Link www.blmforum.netPORTS & LOGISTICSThe consensus is conflicting, but keyindustry figures have said that a vote toleave the EU (or Brexit) could put theUK’s trade links to Europe in jeopardy.With its busy ports and transport links,Yorkshire and Lincolnshire has morethan a vested interest in preserving ourinternational connections in Europe andbeyond. Around half of all exports fromYorkshire and the Humber are to the EU;subsequently, companies are choosingto invest in the region because it acts asa gateway to Europe. Many of thealternatives and counter arguments thathave been put forward to complementthese links in the event of a Brexit don’tmatch the strength of our region as itcurrently stands. Whatever the outcomeof the forthcoming referendum,maintaining these invaluable connectionsis paramount. Our region is a vital cog in the globaltrade machine, meaning that its exportties outside of Europe are just as crucial.For example, Lincoln-basedmanufacturer of commercial cateringequipment, Lincat, has recentlycompleted its largest export order to date. The shipment, worth £135,000, was toone of the company’s long-termdistributors, Mabrook Hotel Supplies Co,in Kuwait, and was dispatched in three40 feet containers. It comprised aselection of products from Lincat’sSilverlink 600 range of medium dutyprime cooking equipment, as well astoasters and pizza ovens. Due to itsflexible production capabilities, Lincatwas able to dispatch the order in justthree weeks.Diane Pawlett, Export Sales Manager atLincat, says: “Mabrook is our long-termpartner in Kuwait and has helped us toestablish a strong business in thecountry. They are always keen tointroduce new products and it waspleasing to see that they included aquantity of our new Silverlink 600induction hobs in this order. This deal istestament to our ever-expanding exportefforts on an international scale andshows a real strength in our overseassales.”As the link between Kuwait andLincat, the Middle East region is one ofthe most fertile and exciting for imports.Bradford-based bespoke sign, displayand LED lighting manufacturer Applelecis experiencing increased exportdemand for its products followingsupport from the LEP. Already supplied to hospitals,museums and retailers, and majorbrands and organisations, newcustomers for the product are emergingin the Middle East. In support of itsgrowth, Applelec has been given almost£47,000 from the LEP since 2013indicating the importance of targeting,establishing and nurturing internationalexport links. The grant funding has been used aspart of a total £182,000 investment tosupport the purchase of Applelec’sBowling Back Lane site, an industrial unitused to provide additional storage andfabrication capacity. And with a Londonshowroom launched this year Applelec,which operates from three sites inBradford, is looking to invest further inGoingglobal Maintaining international connections in the face ofthe forthcoming EU referendum will prove crucialto the future of trade in our region. 16-19_Layout 1 03/05/2016 10:16 Page 1www.blmforum.netBusiness Link 17its operations throughout 2016.Managing Director Ian Drinkwatersays exporting, particularly to theMiddle East, was a major opportunityfor the company, with a clear strategicfocus on LED Light Sheet. “Over the lastfive years we have developed strongrelationships with many of the UKsleading architects, designers andspecifically lighting designers who nowspecify LED Light Sheet internationally.This approach has seen steady organicgrowth of the specification and use ofLED Light Sheet beyond the UK.“The idea for targeting the MiddleEast initially came out of a strategyplanning exercise that was funded bythe LEP. Our planning resulted inseveral points for the company to focuson for continued growth, with one ofthese being export.“Local knowledge is key and it’s beenimportant to attend events such as TheHotel Show in Dubai to maintaincontact with clients and ensure localcontractors follow the specificationsmade by UK based designers, when ourproduct is specified.”Mr Drinkwater says that as well as thevolume of construction work happeningin the Middle East, the creativity ofprojects was also fuelling demand forApplelec’s products. “Demand iscertainly being driven by the design andarchitecture communities we work with,and through their specification of LEDLight Sheet and related products.”He adds: “In addition, the exposure ofLED Light Sheet at design exhibitions inthe UK and editorial project coverage ininternational lighting magazines,alongside the work of our businessdevelopment team, has contributed to agrowth in brand awareness of theproduct at home, across Europe and inthe Middle East.”Despite the many successes takingplace across our region, Yorkshire andHumberside’s small to medium-sizedexporters are selling less of their goodsand services overseas, foreign revenuesare expected to grow as they becomemore competitive during the first half of2016, according to the latest Business inBritain report from Lloyds Bank.US company first tenant forDoncaster’s £500m iPortVerdion has secured a new letting to a major US company atiPort, at its £500 million multi-modal logistics development inDoncaster, South Yorkshire.Fellowes, the global manufacturer and marketer of airpurification machines and other office equipment and solutions,has taken IP2b, one of the new speculatively built units at iPort, asits new UK headquarters and EU shared service building.IP2b totals 144,373 square foot, comprising 123,215 square footof warehouse space and 21,158 square foot of office and welfareaccommodation. Fellowes is relocating from its existing building atnearby West Moor Park and is due to move into the new premisesin November this year.Michel van Beek, President, Fellowes EMEA and Asia, said:“This move will offer many advantages including excellent links tothe UK rail and road network. It will offer Fellowes the opportunityto create a more modern and efficient workplace supportive to ourfuture business needs and aspirations.”iPort is a Strategic Rail Freight Interchange (SRFI) which willdeliver over 6 million square foot of Grade A logistics warehousinglinked with a high specification rail freight intermodal containerfacility. PHOTO: SHUTTERSTOCK.COM/TONTON18 Á18 Park Farm Road, Foxhills Industrial Estate, Scunthorpe, North Lincolnshire, DN15 8QPTel: 01724 280440 www.stuartbrumby.co.uk Email: sbrumby05@aol.comWe are a complete manufacture and repair service of alltypes of waterproof covers to industry, agriculture, haulageand leisure. We make covers of all sizes from small cartrailers to heavy goods vehicles.16-19_Layout 1 03/05/2016 10:16 Page 218Business Link www.blmforum.netPORTS & LOGISTICSThe report, which gathers the viewsof 1,500 UK companies, found that theproportion of Yorkshire andHumberside businesses that export hasremained stable in the last six monthsat 34 per cent, but those that exportnow make 36 per cent of their salesoverseas, down from 43 per cent mid-way through 2015.The findings coincided with Exportingis Great Week, a UKTI initiative aimed atsupporting new exporters. Lloyds bankexpressed its continued commitment tosupporting exporters earlier this monththrough its SME Charter and holds astrategic partnership with the UKTI toprovide advice and intelligence to itscustomers.Leigh Taylor, Area Director for theNorth East, SME Banking at Lloyds BankCommercial Banking, says: “Asweakening growth in China and theEurozone creates headwinds for someexporters, it’s unsurprising to see thatless of Yorkshire and Humberside’sSME exporters are generating theirsales overseas, but encouraging to seethat some businesses are still looking togrow those international sales in theyear ahead.Knight Frank seals £19.1m for Wakefield Europort warehouse The Leeds office of global property consultancy Knight Frank has bought a281,000 square foot warehouse at Wakefield Europort for Knight Frank InvestmentManagement (KFIM), acting on behalf of Lancashire County Council Pension Fund,for £19.1 million from IDI Gazeley.The Grade A warehouse, which is located in Tuscany Way, Wakefield Europort, isoccupied by Bibbys Distribution who have signed a new ten-year lease at a rent of£4.16 per square foot.Rebecca Farnsworth, Investment Partner at Knight Frank in Leeds, said: “This isone of the most significant investment deals in Yorkshire this year. The regioncontinues to be popular with investors and this sale underlines that well-locatedassets, with proven occupiers on long-leases, will always be attractive.“The deal also reinforces Wakefield Europort’s reputation as the premier logistics and distribution destination in the region. Its location is superb,with direct access Junction 31 of the M62, the primary Trans Pennine route. The M1 and the A1 are close by, allowing companies to reach over 70 percent of the population within a 4.5hrs drive time.”Other occupiers include Asda, Royal Mail, DHL, Wickes, Argos and Warburtons.“Starting or scaling-up export activitycan be a daunting prospect forbusinesses, but the benefits are manyand we are working hard to supportfirms in Yorkshire and Humberside’sexport ambitions.”There are strategic points for tradeand logistics across Yorkshire andLincolnshire, demonstrating theimportance of our region to worldwidetrade. The forthcoming EU referendumcould disrupt some of the links that areintegral to the lifeblood of the twocounties, but economic excellence liesin wait for savvy exporters to seize. PHOTO: SHUTTERSTOCK.COM/PRASIT RODPHAN16-19_Layout 1 03/05/2016 10:16 Page 3Perfectly positioned, at the heart of England, wheremajor road and rail routes converge.Newark & Sherwood - a great place to do business.Contact Sue Nattrass 01636 655277 or E-mail: susan.nattrass@newark-sherwooddc.gov.ukfor more information about the fantastic business opportunities in Newark and Sherwoodwww.investnewarkandsherwood.co.ukAmbitious growth plansVibrant business communityTalented workforceConnected to the nationEdinburgh250 milesLondon120 milesLincoln16 milesLeicester M1 30 milesEast Midlands AirportRobin Hood AirportIdyllic rural location16-19_Layout 1 03/05/2016 10:16 Page 4Next >