Opinion: John Ippolito

I had the pleasure of visiting the UK this week to meet and work with Headwaters’ Merger Alliance partner, Catalyst Corporate Finance. The purpose of my trip was to meet with investors and leaders of some very interesting advanced manufacturing technology companies that will eventually be of strong interest to US and other global trade buyers.

Part of the trip included a visit to the second city Birmingham, discussing the state of play on manufacturing in the Midlands. I learned quite a bit and was impressed by the reminder of how vital this region is, and how deep the knowledge of industrial technologies is, particularly around automotive applications.

These days, Americans are bombarded by media coverage of the travails of the Eurozone and it becomes difficult to keep straight the very different circumstances and opportunities for European economies as one moves farther outside of the southern Euro zone. I met with one company who is experiencing greater than 30% growth in turnover this year, with an outlook for sustained growth over the coming 2-3 years and beyond. UK companies are so much more proficient and prepared to become global exporters than US counterparts. I think this is why US companies often look to the UK for promising M&A targets that can help speed their entry to new end user markets and new technologies.

We concluded a successful couple days of business by reviewing roughly two dozen large, international trade buyers we are both working with, where we continue to leverage our collective knowledge to bring more and better ideas to the fore regarding opportunities to acquire attractive, growing companies. Recognizing the softness of the lending environment for smaller companies, both in the UK and the US markets, it looks like astute trade buyers will maintain their advantage over financial sponsors seeking well-managed industrial technology providers.

A slow growth forecast in the US for 2012 means buyers will feed their growth needs via targeted M&A activities.

JOHN IPPOLITO IS A MANAGING DIRECTOR AT HEADWATERS MB, THE US MEMBER OF CATALYST'S INTERNATIONAL PARTNERSHIP MERGERS ALLIANCE. JOHN SPECIALISES IN THE INDUSTRIALS MARKET AND CAN BE CONTACTED EITHER DIRECTLY AT HEADWATERS ON THE E-MAIL ABOVE OR VIA THE BUSINESS MANAGER OF MERGERS ALLIANCE, STAS MICHAEL ON +44 207 881 2990.