Northwest
High power
Within the top-performing 25 businesses, the Northwest is dominated by PE-backed companies active in the consumer and manufacturing spaces. In the case of the former, the seven firms in the top 25 generated average Ebitda growth of a massive 137%, thanks in no small measure to TriSpan-backed Mowgli Street Food, which saw profits rise from less than £100,000 to more than £3m in the three-year period. Companies such as Boost Juice Bars (backed by BGF) and natural pet foods maker MPM Products (3i) also put in stellar performances in the period.
In the manufacturing space, the 10 companies that made it into the top 25 generated an average Ebitda growth of almost 105% per annum, led by Alcuin-backed fitted furniture manufacturer Neville Johnson Ltd, which grew profits by almost 400%. Other notable performers in the manufacturing area were Evoke Creative (BGF) and Harman Technology (Pemberstone).
While there were relatively few TMT businesses among the top performers, broadening the view to include all qualifying firms gives a better sense of the region’s burgeoning IT sector. Just three of the top-performing companies hail from this space, one of which is the former Inflexion portfolio company Mobica.
Inflexion made a minority investment in Wilmslow-headquartered software developer Mobica in 2015. At the time, the founder was looking to sell a minority stake, and Inflexion’s recently raised Partnership Fund, focused on minority investing, facilitated a fruitful dialogue. “We were able to speak to the founder about how we approach minority investments,” recalls Chris Wright, partner and head of Manchester at Inflexion. “Both in terms of partnering with founders to receive private equity investment and the associated benefits, as well as retaining control.”
We made a significant investment in the company's infrastructure and we helped to grow and support the management team”
Inflexion’s investment into Mobica was the company’s first time working with private equity. “We supported the management team in developing systems and boosting the sophistication of its processes, as well as training and recruitment. We also made a significant investment in the company's infrastructure and we helped to grow and support the management team,” explains Wright.
“We see more operating partners and value creation teams in private equity firms who are working in partnership with management teams. That’s hugely positive as it shows they’re not just providing cash and taking control. They are providing both functional and sector expertise to help drive and accelerate growth.”
Sarah Ziegler, Head of Private Equity Coverage, BDO
With Inflexion’s support, Mobica scaled to an international organisation, while 100 people were added to the employee base. “We also invested heavily to grow into the automotive sector in Germany. It was really important to develop the business from undertaking short-term projects into multi-year projects in order to improve earnings,” says Wright.
And thanks to improved earnings and its growing international client base, Mobica attracted international trade buyers. In March 2023, Inflexion sold the software development company to Cognizant, a US-based Nasdaq-listed business, in a deal that valued Mobica at £250m.
And as clearly evidenced from the fastest-growing private equity-backed companies in the list, the Northwest is home to numerous international companies. “We see internationalisation as a real point of difference ourselves. We have really invested in our own international capability, which ultimately benefits the companies we back. We have teams in Asia, India, Brazil and North America who are there to support our portfolio companies in expanding to those regions.
"So, for privately owned companies in the north of the UK that are looking to grow their operations in say India or Brazil, we can provide people on the ground supporting that growth. Accessing those international markets and driving longer-term growth is a really interesting and attractive dimension that private equity can bring.”
For Wright, the Northwest region is highly attractive for doing deals thanks to several factors.
“It has a great advisory base and many private equity firms have chosen the Northwest as their second location outside of London. It’s also a highly entrepreneurial region, with strong infrastructure and good transport as well as a large university base, which all combines to make that entrepreneurial industry, and ultimately, the investment activity that relates to it,” he concludes.
Accessing international markets and driving longer-term growth is a really interesting and attractive dimension that PE can bring
“We should never forget where the real magic happens; it’s in the businesses, in the management teams and in their entrepreneurial spirit.”
Jamie Austin, Global Head of Private Equity, BDO
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