Deal Of The Year - How 2008 beat all expectations

Apr 3 2009 By Alun Thorne, Head of Business

The deal-making community may have had one of its toughest years for some time but as the Birmingham Post’s Head of Business Alun Thorne discovered, competition remained as fierce as ever for the plaudits in the 2008 Deal of the Year.

The feeding frenzy that was the hallmark of the deal-making sector in previous years may have been tempered by the challenging economic climate but those who thought 2008 was something of a washout were a long way from the mark.

Opportunities may have been more limited in line with the available funding and advisors had to work twice as hard to earn their corn but work twice as hard they did and the result was another year where Birmingham reinforced its reputation as a city with the spirit to do a deal and the personnel to get it done.

To borrow some well-used footballing parlance, it was undoubtedly a year of two halves. While there were clearly storm clouds gathering in the early months of 2008, it wasn’t until the summer arrived that the debt market began to dry and the consequences of this reality was well reflected in the candidates for this year’s Deal of the Year – as private equity found it more and more difficult to secure funds, so the corporates came. In short, it was M&A where the really big deals where going on.

There were eight significant deals that made it onto the M&A deal of the year shortlist and all of them were more than worthy of their place at the top table. In the end it was a straight fight between two or three stand-out deals.

The judges were eventually swayed by Hampson’s £158.2million acquisition of Michigan-based Odyssey Industries and Global Tooling Systems over deals such as Umeco’s acquisition of Italian Industria Plastica Monregalese and Gardner Denver’s acquisition of Compair Holdings Ltd, not only for the best M&A deal but also the overall Deal of the Year as well.

As judge Steve Douglas, from Arden Partners, said, the accolade is recognition of how far the company has come since the turn of the Millennium.

He said: “Hampson is a business that if you go back to 2001 the aerospace industry was really not a great place to be. Hampson survived that period and recognised what needed to be done. It formulated a very clear strategy which they communicated and started implementing five years ago and this latest acquisition is another big step in achieving what they set out to do. It is a local business based in Brierley Hill, it has essentially been extremely loyal to the local advisory community and it has an extremely capable management team.”

Again in the private equity category there were two deals that stood out from the competition with a definite feeling that both had seen excellent business done with a strong input from the local advisory community – all of whom had to pull out all the stops to get the deal done in the most trying of environments.

Highly commended was the management buy-out of Johnson Clothing - since re-branded as Dimensions clothing – for £82.5million last November but the judges decided that the investor buy-out of Tyrells Potato Chips led by Langholm Capital ticked more of the right boxes – a great company, a sensible price, a flexible approach and a host of Midland advisors.

The Flotation of the Year was one of the more straight-forward decisions for the judges for the simple fact that the IPO market was shot for vast majority of last year.

With the stock market working six to nine months ahead of the rest of the economy, those with half an eye on reality could see what was approaching – and it was certainly no time to go public – though even the wisest of sages could not have