It’s been a funny old year for corporate financiers, who (apart from the handful beavering away at the Alternative Investment Market) spent the first few months bemoaning the general lack of activity and stating that the figures for deal values had no chance of matching last year’s, skewed as they were by a handful of giant deals such as the £800 million purchase of Manchester United by the Glazer family’s Red Football vehicle, and the £668 million sale of British Vita to Texas Pacific Group.

Even as late as last month, when analysing the Centre for Management Buy-Out’s Research’s statistics, Paul Lupton, a corporate finance partner at research sponsors Deloitte, was explaining away the drop in the values of completed private equity deals.

“We have seen a drop of more than 56 per cent compared to last year with figures falling from £2.7 billion to £1.2 billion. The region has experienced a drop in mid-market deals, and transactions in the lower mid-market range of between £10 million and £50 million are particularly slow, with only four reaching completion this year compared to 13 in 2005.”

However, as our round-up of the region’s top 20 deals shows, perhaps this statement was a little too pessimistic. Firstly, the numbers quoted seem to be solely for private equity deals, and in fact Corpfin Worldwide’s research seemed to suggest that total deal values for the North West actually increased by 32 per cent in the first three quarters, up from £15.3 billion to nearly £20.3 billion.

Whichever measure one uses, though, there has been an undeniable surge in deal activity within the final quarter of 2006, with deals such as the £210 million acquisition of Target Express, Peel Ports £750 million sale of a minority stake in its ports business, Paymentshield’s £180 million sale to Towergate and (if it gains shareholder approval on time, as expected) the Hargreaves family’s £817 million take-private of Matalan all being completed.

1 CAUDWELL GROUP (sale) Value: £1.5bn

John Caudwell has a reputation as a man who knows what he wants and doesn’t suffer fools gladly. Therefore, when he took the difficult decision to sell the Stoke-on-Trent-based mobile phone empire he founded in 1987, the negotiations were likely to be uncompromising.

And so it proved. A beauty parade in the summer of 2005 eventually saw NM Rothschild appointed to handle the sale (alongside Caudwell’s longstanding advisors from Eversheds), which proved to be eventful. Firstly, the vendor made it clear that he wasn’t interested in a deal which would involve shares, earn-outs or anything else that would require him hanging around an empire which now boasts more than 376 Phones4U shops, a significant distribution division and a management team which was more than capable of handling the business.

His other stipulation was that he didn’t want to see the business sold to another mobile phone retailer, and not just for competition reasons. As he told EN after completing his deal in August, “I’ve spent 20 years growing the business and creating an awful lot of jobs, and the last thing I wanted to see was a trade buyer come in and make lots of people redundant.”

The deal (well, technically deals) he signed meant that both wishes were eventually achieved, but only after some jostling and repositioning along the way. For instance, halfway through the negotiations the group delivered much stronger than anticipated results (buoyed by growth in the Middle East). Then, as the deal was being completed frontrunner Bain Capital was replaced by Providence – a US-based venture capitalist which specialises in telecoms. It bought the main Phones4U retail business, while Doughty Hanson bought the 20:20 Logistics distribution company and Dextra Solutions. The combined figure for both was an eye-watering £1.46 billion.

Added to the £40 million he’d received a month earlier for selling his Homecall business to Pipex, this brought the total to a nice, round £1.5 billion. This represents around nine times its 2005 earnings before interest, tax, depreciation and amortisation (EBITDA) of £161 million, which he has described as “a fair price...certainly not a great price”.

Caudwell received £1.2 billion for his 85 per cent stake, with his brother Brian (who owned 10 per cent) and finance director Craig Bennett (5 per cent) sharing the rest.

Advisors: Eversheds, NM Rothschild.

2 PAYMENTSHIELD (sale) Value: £180 million

A very tidy deal not only for the management buy-in team which paid £37 million to Paymentshield founders Richard Riding and Patricia Cottrell two years ago, but also for the Bank of Scotland Integrated Finance team which backed the deal and was the biggest stakeholder in the business.

Paymentshield was re-sold to independent insurance broker Towergate for £180 million, which means the 49 per cent owned by the bank brought in just under £90 million. Meanwhile, a four-strong management team headed by chief executive Stuart Pender (who owned around 20 per cent) shared the rest of the proceeds after managing to virtually triple the number of mortgage protection insurance policies the business sold during its short reign. As the deal completed last month, the amount of premiums it had written had increased to more than £200 million and it had become the market leader in the provision of buildings, contents and mortgage payment protection policies to intermediaries.

The plan for Paymentshield (in the short term at least) is to operate independently, with its 300 staff remaning in Southport and continuing to choose its own agents and underwriters.

Advisors: Deloitte, DLA, Dow Schofield Watts.

3 PEEL PORTS (partial sale) Value: £750 million

John Whittaker’s Midas touch doesn’t seem to have deserted him as he heads towards pensionable age. The 64 year-old owner of The Trafford Centre and Manchester Ship Canal, as well as Liverpool, Doncaster and Durham Tees Valley airports has been building a significant interest in ports over the past five years.

He first acquired Clydeport for £184.4 million in 2002. Then, in 2005, Peel took control of Mersey Docks and Harbour Company, which included ports at Liverpool, Heysham and the Medway ports at Sheerness and Chatham, as well as another 800 hectares in Liverpool and 350 hectares in Kent. Since Peel is an expert in redeveloping land, it was believed that the land assets (especially at Liverpool) were the primary attraction. But then overseas investors such as Australian bank Macquarie and Dubai Ports begin bidding for British ports and other infrastructure investments, sending prices through the roof.

Peel’s business, which also contains sites in Belfast and Dublin, had become the second-largest ports operator in the country, and although much of the land it inherited in these later deals has been placed into other divisions earmarked for development projects (including a hugely ambitious £4.5 billion Wirral Waters scheme in Birkenhead), the firm was still able to command £750 million for a 49 per cent stake in its Ports operating division when it was sold to RREEF – a property and facilities management arm of Deutsche Bank – in November. This valued a business with a turnover of £420 million and profits of £100 million at just over £1.5 billion.

Advisors: Deloitte, NM Rothschild

4 JERROLD HOLDINGS (dev cap) Value: £113.5 million

John Walker, head of Barclays Private Equity’s Manchester office, seemed unfazed about writing out his firm’s largest ever investment cheque to Manchester-based Jerrold Holdings in eptember. Although it had shelled out £113.5 million for a “significant minority stake”, the VC was simply happy to finally own a piece of a business it had been admiring from the sidelines for years.

Jerrold is a secured loans and bridging finance group which was started way back in 1973 by Barrie Pollock (who has since left the firm) and Henry Moser (who owned 86 per cent prior to this deal being completed).

It owns a group of subsidiaries, including Blemain, Lancashire Mortgage Corporation and Bridging Finance, which offer secured loans of between £10,000 and £2 million to both personal and commercial property clients.

It had originally begun seeking investment four years ago and met the Barclays Private Equity team then, but at the time the VC believed the firm wasn’t quite ready for investment. It kept an eye on the business, though, and “remained impressed” by Jerrold’s ability to continually meet the financial targets it set itself. Its pre-tax profits have climbed from £6.1 million in 2001 to £37.3 million last year on a loans book of around £600 million a year.

When the VC found out that the company was once again seeking investment, it managed to beat some strong competition and invested the cash in a deal which values the firm at around £340 million. This has allowed Moser to take some cash out, but also lets a couple of key members of the management team (particularly sales director Marc Goldberg and finance director Gary Beckett) take equity stakes.

“There aren’t many businesses that we’d be prepared to chase for four years,” says Walker. “But we’ve been constantly impressed by it.”

Advisors: (To management) Deloitte, Eversheds,NM Rothschild. (To Barclays) DLA Piper, KPMG.

5 SOUTH LAKELAND CARAVANS (sale) Value: £100 million

EN’s North West Entrepreneur of the Year, John Morphet, has become a master of the art of reinvention over the years, from humble farmer to caravan park owner then finally on to luxury resort developer. However, even by his standards, the past two years have been pretty eventful.

Since buying the White Cross Bay development on the banks of Lake Windermere in 2000, the caravan parks entrepreneur realised the more attractive margins on offer at the premium end of the market and began building luxury timber lodges instead. A 65 acre, purposebuilt development at Carnforth known as South Lakeland Leisure followed, before developments in Spain, Cyprus and his jewel in the crown, the Royal Westmoreland holiday resort in Barbados. Indeed, it was his ambition to continue with bigger and grander schemes which initially led him to react favourably when advisors from KPMG sounded him out about selling his business two years ago, following a huge increase in valuations in the sector. Work started last year on a buy-out of his nine caravan sites across the North of England to a management team but, as the deal became more protracted, it became clear that the company wasn’t ready for a sale.

Morphet then employed one of his advisors from KPMG, Nick Dodd, as his finance director. He helped to prepare for a sale by forming a holding company, Pure Leisure, which housed the more prestigious overseas developments while the remainder was housed under the South Lakeland Holidays company. In the meantime, Dodds helped Morphet put together his biggest UK investment to date – A £25 million purchase of a huge 235-acre caravan site in Northampton known as Billing Aquadrome. This, too, was placed into the Pure Leisure business.

The deal was then restructured allowing Morphet to also keep hold of the South Lakeland Leisure development at Carnforth, which Dodds explained still needed work: “It’s exciting for an entrepreneur but hard work for a VC.”

It was eventually completed in June with Legal & General Ventures and Allied Irish Bank stumping up £100 million to back a management team led by chief executive Graham Hodgson.

Advisors: DLA PIPER, KPMG.

6 Matalan (public-to-private) Value: £817 million

Included here with a caveat, as shareholders have yet to give the deal the green light, but it seems as if John Hargreaves’ bid to bring Skelmersdalebased discount chain Matalan back into family ownership is destined for success. His £408 million bid for the 47 per cent of the company which isn’t in family hands (valuing the firm at £817 million) was accepted by Matalan’s board early in October, although some commentators have argued that the board’s hands were tied, given that Hargreaves’ family owned a majority of the business. Shareholders have also accused the family of trying to buy the business back on the cheap.

Whatever – his bid, underwritten by Icelandic firm Kaupthing Singer and Friedlander, was the only offer on the table and it represented a 20 per cent premium on the company’s price prior to an announcement following bid speculation in June.

Removing the constant demand from City journalists and analysts must surely have been one of the reasons why the publicity-shy Hargreaves has decide to go private, although speculation persists that this buy-back is just a step on the road to its eventual sale.

There is another, less cloak-and-dagger explanation, though. Perhaps the man who grew this business from a single stall on Liverpool’s Great Homer Street market feels that he could run this business more easily without outside interference and pressure to return dividends.

Advisors: (to purchasers) Kaupthing,PwC.

7 Chemicare Health (sale) Value (e) £20 million-plus

A great deal for many reasons, but particularly for the four main beneficiaries – Pete Burrows, Martin Molyneaux, Gary Sawbridge and David Turner. The four men had previously owned independent pharmacies of their own, but sensed the prevailing wind in the industry (with bigger chains snapping up independents) and banded together in 1999 to create the Knights Pharmacy brand.

The St Helens-based business planned to build a chain of up to 50 pharmacies, and had secured some £10 million in development capital from Royal Bank of Scotland to help achieve this. The cash was used to buy other independent pharmacies, as Government regulation of pharmacy licences makes organic growth nigh-on impossible. These acquisitions helped Chemicare to achieve a staggering rise in sales from £1.3 million in 2001 to £16.6 million by March. However, once prices in the sector also started rising dramatically, it received an offer from Alliance Unichem which was too great to turn down. The offer was undisclosed, but EN understands the four men were to receive more than £20 million for their 18-strong chain of outlets, which generated profits of £680,000 last year.

As the deal drew to a close, however, Alliance also announced plans for a megamerger with Boots and, although the UK board assured Chemicare’s directors that this would not affect their deal, on the night before it was due to be signed in March a veto came through from Alliance’s Switzerland head office. “It had all been agreed and negotiated, and they’d even sent 40 people up to complete the negotiations, but it looked like 12 weeks of work was going down the drain,” explains Paul Tyrer of law firm Geroge Davies, which was advising Chemicare’s shareholders. It sprung into action and within 48 hours L Rowland, a Runcorn-based retail chain ultimately owned by a Germanbased pharmacy giant, agreed to step in under the same terms.

Advisors: George Davies,PKF.

8 RENOVO (IPO) Value: £57.5 million

Biotech firm Renovo might not expect to make a single sale until 2009 but that hasn’t stopped the stock market valuing it at £264 million at the last count, based on great expectations of its pipeline of drugs, led by anti-scarring treatment Juvista.

To enable the continued development of this pipeline to a stage at which its drugs can be licensed and marketed, the company floated on the London Stock Exchange in April 2006. This was Renovo’s second attempt at a float – the first was pulled a year previously when market sentiment turned against the sector as a whole and a number of biotech firms were forced to abandon planned initial public offerings.

Shares in the Manchester University spinout, founded by Prof Mark Ferguson and Dr Sharon O’Kane in 2000, began trading at 87p a share – a figure that has since almost doubled. The IPO raised a total of £50 million for reinvestment in the business, while the exercise of a “green shoe” provision enabled the underwriters of the oversubscribed float to hold back a proportion of the shares and later release them to raise a further £7.5 million. The management team have retained equity stakes in the business, as have its original VC backers (US-based Atlas, Healthcap, JP Morgan and Care Capital) which have held on to their shareholdings beyond an initial six-month tie-in period.

Advisors: Goldman Sachs, Nomura Code, Morrison & Foerster.

9 LATIUM GROUP (acquisition) Value: £59 million

It is difficult to put a finger on just what went so spectacularly wrong at Ultraframe, the Clitheroe-based windows and conservatories business founded by John Lancaster, but go wrong it undoubtedly did. Until a couple of years ago, the company was a giant in its sector, shelling out £89 million for US-based conservatory firm Four Seasons in 2001 and retaining a market value of almost £360 million up until 2003. Since then, however, the wheels have fallen off and earlier this year it lost a long-running patent battle with Bolton-based Burnden Group.

“It had a 100 per cent record when it came to litigation,” explains Phil Adams of Altium, who led a bid to take the company off the stock exchange. “It lost every case that it fought.”

Declining sales and a consistent series of profit warnings saw its value plummet and, although there were a number of interested parties sniffing around when the business was put up for sale by NM Rothschild earlier this year, they lost interest when Ultraframe released trading figures which showed a a further 20 per cent slide in sales in the half-year to March.

However, home improvements entrepreneur and Sale Sharks owner Brian Kennedy remained confident of his company’s ability to revive Ultraframe, and in the end his bid of 30p a share – valuing the business at £29.2 million – was accepted by Ultraframe’s board on the condition that Latium also subsumed around £30 million of group debt.

On completing the deal, Kennedy explained to EN that his aim would be to intergrate Ultraframe’s UK manufacturing business with his own, and to use the retail operation in the US to offer respected Latium brands like Weatherseal and St Helens Glass.

Advisors: Altium, DLA Piper.

10 NES Group (sale) Value: £86 million

A nice deal for Geoff Lloyd and Bryan Sullivan, the co-founders of specialist recruitment business NES Group, and for exiting private equity backers Bridgepoint. The company, which started life in 1978 as Northenden Engineering Services, specialises in providing white collar contract and permanent staff to engineering businesses in a range of sectors including IT, rail, oil and gas, chemicals and construction. Its base is in Altrincham, but it has 14 offices in total – seven of which are spread overseas in places like the US, the Middle East and South East Asia.

Bridgepoint gained a majority share from Lloyd and Sullivan in a £32 million deal in 1999, and the business has continued to grow as its key markets have expanded. Its overseas offices, particularly, were seen as an important asset when Bridgepoint began preparing the business for another sale to realise its investment. This secondary buy-out, completed in September, saw Graphite Capital back a management led by NES’s chief executive Neil Tregarthen in a deal which valued the business at £86 million and gave the co-founders a lucrative exit.

Tregarthen joined the business two years ago and has overseen a compound sales growth in the business of 33 per cent and then 47 per cent in the year to October 2006, when the business turned over £177 million.

Advisors: (To Bridgepoint) Bridgewell, Travers Smith. (To management): Ernst & Young, DLA Piper.

11 Bargain Booze (acquisition) Value: £63.5 million

Bargain Booze has become a retail phenomenon, spreading like a rash over Northern towns over the last 20 years, as more and more independent shop owners have become franchisees. The clue to the popularity of this Crewe-based organisation, which started life with just one small Sandbach store owned by Allan Whittle and Robert Mayor, is in its name. It knocks out huge volumes of booze to retail customers through a chain of more than 600 outlets at cheaper prices than rival pubs and off licences pay at wholesalers.

“It offers supermarket prices and local convenience,” says Tim Raffle of ECI Partners, which emerged victorious from an auction to buy the business from Irish wholesaler BWG back in January for £63.5 million.

“Since many of the stores are in what you’d describe as poorer areas, the rents are also a lot cheaper than rivals like Thresher.”

BWG had bought the business from its founders in 1999, but the Irish-based business had itself been sold by parent group Pernod Ricard to venture capital firm Electra. The fit between Bargain Booze and BWG didn’t make as much sense to its new owners, as there were neither geographical nor supply chain synergies, so it began listening to offers for Bargain Booze in June 2005 and completed the deal in January.

Allied Irish Bank provided debt funding for the deal, which has seen ECI take a controlling stake in the business, but Raffle insists that the three-man management team of joint MDs Tim Stanley and Matthew Hughes as well as finance director Peter Hodgson, “had quite a lot of influence” when it came to structuring the deal. They have all received equity stakes, and have been given the resources to embark on a £15 million rollout which could eventually lead to Bargain Booze doubling in size.

Advisors: Addleshaw Goddard, Grant Thornton, NM Rothschild

12 Debtmatters (acquisition) Value: £19 million

Debtmatters has enjoyed something of a purple patch since its stockmarket debut last May. The business, set up in 2003 by former commercial insolvency practicioner Ges Ratcliffe, is one of a bunch in the North West to offer heavily indebted customers with unsecured debts of £20,000 or more the chance to write off a huge chunk by entering into an IVA (or individual voluntary arrangement).

The company then takes both an upfront fee and a monthly management fee for arranging these agreements, which typically last up to five years. Last year’s float was carried out to help it fund the upfront costs of acquiring waves of new customers, but management also declared its intention to acquire businesses that offer other services to hard-up customers. In this respect, its Bolton-based neighbour, Loanmakers, seemed like a perfect fit.

Firstly, the company, which was owned by former First National Bank employees Kevin Hindley and Tim Wheeldon, had been growing incredibly quickly. From a standing start, it made profits of over £1 million last year and its bottom line continues to grow at a rate of around ten per cent each month. Secondly, since it offers secured loans, it provides an alternative for customers who approach Debtmatters for advice, but for whom the IVA route is unsuitable. The price it has paid for the business is considerable – £10 million in cash up front (funded by RBS) with a further £9 million payable over the next two years if the seven year-old business hits performance targets. However, as Baker Tilly’s Gary Houghton (who led the deal on behalf of Debtmatters) explains, valuing businesses that are growing so quickly can be difficult.

“That’s why the deferred consideration element is so high,” he says. “But it was quite complicated to arrange, particularly the debt, as neither business has a lot of traditional security.” Despite criticism of the sector from the high street banks, Debtmatters continues to make healthy profits (£2.8 million on a £7.8 million turnover) and its share price has climbed from 65p on issue up to its current (at the time of going to print) level of 305p, giving it a market cap of just over £75 million.

Advisors: Baker Tilly, Halliwells.

13 Styles & Wood (IPO) Value: £71 million

The flotation of Altrincham-based shopfitting firm Styles & Wood has allowed the former family business to free itself from the grip of venture capitalists and puts chairman Gerald Quiligotti back in control.

The company was started as a shopfitting business, but in recent years it has matured into more of a specialist facilities management firm for retailers, undertaking store planning, fitout and maintenance services for a range of blue chips including Tesco, M&S and Debenhams.

The company has been through a couple of buy-outs over the past 12 years – the latest of which (a £28 million secondary buy-out in May 2004) had seen Aberdeen Asset Management become the majority stakeholder. However, this oversubscribed float, which saw S&W raise £72 million in a deal that gave it a market cap of £97 million, allowed a successful exit for Aberdeen, which received £56 million for its stake and (factoring in refinancings) a total return of eight times its original investment.

The company also raised a further £34.5 million of senior debt and working capital from Royal Bank of Scotland, which will allow it to continue its strategy of seeking long-term ‘framework agreements’ with the major retailers. Chairman Quiligotti, who has been in charge of the business throughout, is predicting sales of £264 million (up from £170 million) and an EBITDA of £10.8 million by the end of 2006.

Advisors: Halliwells, Investec.

14 Individual Restaurant Group (reverse takeover) Value: up to £41 million

Steven Walker’s plans for a stealth attack on the nation’s finer restaurant districts with one of either Individual Restaurants’ Bar & Grill or Piccolino’s outlets have moved up a gear following this reverse takeover deal, which has seen the firm effectively listing on Aim by having its share capital acquired by listed restaurant group Bank. The deal basically consists of a £32.5 million sale, which could eventually rise to £41 million, depending on performance targets being met. This has been paid by a mix of cash and shares, which has allowed both of the companies to pay back accrued debts.

Both the Piccolino’s and Bar & Grill concepts were created by Est Est Est founders Derek and Edwina Lilley. Two years ago, they sold a chain of six restaurants to Individual Restaurants, a Gresham Private Equity-backed vehicle led by Walker, for £18 million.

Walker, who had previously sold food business Yorkshire Kitchens to Irish firm Greencore for £18.4 million, retained the Lilleys on the management team and also brought in ex-Inventive Leisure FD Vernon Lord, announcing plans to roll out the business across the UK. Since then, he has opened a further ten restaurants. These will be rolled into Bank, which itself has three own-brand restaurants, plus a further five Zinc Bar & Grill outlets which were acquired from Conran Holdings in December 2005. This enlarged business will then be renamed Individual Restaurants Company, and will concentrate on opening at least six new restaurants (mainly Piccolino’s) each year, in a bid to conquer what it describes as the “premium casual dining” market. A £13.5 million rolling credit facility from Lloyds TSB has been put in place to help achieve this.

“We look forward to capitalising on the opportunities that being part of the enlarged group will present,” says Walker.

Advisors: Altium, Cobbetts, Grant Thornton, Halliwells.

15 ANC (MBO) Value: £33.5 million

The £33.5 million buy-out of Warrington-based parcel delivery firm ANC Group is described as a “classic” private equity deal by its current backers, LDC. It certainly is in its current guise, where it has backed an incumbent management that has turned the business around, but this hasn’t always been the case.

The company was formed in 1982, but underwent its first buy-out more than a decade ago, when HSBC’s private equity arm invested £19.8 million into a £50 million management buy-out. It sold out to PPM Ventures for an undisclosed sum, but under the latter’s ownership performance dipped dramatically and the firm made a £7 million loss. This led the banks which backed the deal (Bank of Scotland and Royal Bank of Scotland) to initiate a debt/equity swap which saw PPM shoved out of the picture.

A new management team led by former Swift Transport Services boss Mark Gittins was installed in 2001, and has since embarked on a turnaround which has returned ANC to profitability. LDC invested in a £37.3 million management buy-out in February, which saw it take 25 per cent of the equity owned by the two banks. Management has taken the other 25 per cent, bringing its total stake to 75 per cent.

The company has an 11 per cent share of the UK parcel delivery market. It has seen its turnover rise from £123 million last year to £133 million and, when revenues from franchised overseas territories are added, this climbs to over £180 million. Importantly, though, it is also the leading independent in a sector which has been experiencing lots of consolidation, as the £210 million acquisition of Target Express proves.

“It would be a valuable strategic acquisition for many companies in the sector and we expect to make a strong return on our investment in the not-too distant future,” says Johnson.

Advisors: (to management) Dow Schofield Watts, Eversheds. (To LDC) Halliwells.

16 M2 Digital (dev cap) Value: £12 million

When EN last bumped into M2 Digital’s owners Peter Quinn and Mike Driver, the pair (who have known each other since their schooldays in Southport) were preparing for a boozy weekend in Marbella’s exclusive Puerto Banus resort to reward their top sales staff.

Even if the bar bill was likely to be hefty, it would have been money well spent. The Manchester-based company, which provides photocopiers and other business machines principally to SMEs, has enjoyed strong growth of late, and is expecting a huge boost in both sales (from £12.6 million to an estimated £22 million) and profits (up from £2 million to £3.5 million).

The break will also give them time to reflect on their decision to sell a minority stake in their business to ECI Partners for £12 million, in what ECI’s Tim Raffle described as a “slightly unusual hybrid of a deal”. This allows a partial cash-out by Driver and Quinn, but also gives incumbent members of the management team an equity stake in the business and adds experience and professional structures that will enable the two (should they see fit) to sell the business more easily further down the line.

Raffle says, “It wasn’t just a case of it being a virtual sale with them only being interested in the highest bidder – they were genuinely looking at ways of moving the business forwards.”

He points to the recruitment of David Mitchell (former CEO of another ECI-backed venture, Astron) as M2’s new chairman as evidence.

Driver and Quinn new intend to capitalise on the growth in popularity of higher-value, full-colour copiers and have set themselves a turnover target of £45 million by the end of 2008.

Advisors: (to management): DLA Piper, Ford Campbell. (to ECI) Hammonds.

17 Chill Factore (dev cap) Value: £31 million

If you think that traffic flow to The Trafford Centre during the busy Christmas and January sales periods can’t get much worse than it already is, think again. If all goes well (or badly, depending on whether you’re a driver in the area), David Sterland, Peter Moore and Andrew Lockerbie are hoping that thousands more journeys will be being made there next Christmas after they open the doors to a new 14 storey, 250,000 sq ft retail and leisure scheme centred around a huge 180m-by-100m ski slope made from real snow.

In fact, the only thing more impressive than the ambition of the three developers (a former developer of Capital & Regional’s rival Xscape scheme, an ex-MD of Center Parcs and one of Britain’s top ski instructors), is the fact that they managed to raise the £31 million needed for what is effectively a start-up – and a risky one at that – without putting in any significant amounts of capital themselves.

Nigel Edwards of advisors Structured Risk Projects (which has taken an equity stake in the business) admits that putting the financing for the deal together was difficult.

“It’s quite a big number for a pure start-up with no other assets, so we had to convince people to lend against more than the value of the assets for it to be viable,” he explains. “It didn’t appeal to regular VCs, and it didn’t seem to fit with what the VCTs were doing either.”

Eventually, a deal was completed in August to provide developer Extreme Cool with the necessary cash from a variety of sources.

Gloucestershire-based Pemberstone Group (a privately owned property group) has taken a stake, as has Bridges Community Ventures – the Government sponsored ‘community’ venture capital fund. Royal Bank of Scotland has also provided senior debt while Allied Irish Bank’s Capital Markets division has put in a mezzanine loan.

All that remains now is for the developers to finish the project in time for the Christmas rush next year. If they manage that, it seems plenty of the region’s financiers will be on the piste.

Advisors: Halliwells, Structured Risk Products

18 Morson (IPO) Value: £36 million

Recruitment consultancy Morson is one of a number of long-established business (see Styles & Wood, qv) to make use of the Alternative Investment Market and become a public company in 2006, and its circumstances are not dissimilar.

The company, which was started by Gerry Mason in 1966, supplies more than 7,000 white collar technical contract staff to engineering firms, finding long-term contracts for candidates on major infrastructure and defence projects including Heathrow’s Terminal Five and the nationwide Network Rail upgrades.

It, too, had taken on private equity backing, selling a 55 per cent stake in the firm in a deal which valued it at £55 million. However, disagreements over future strategy led the investor and management to go their separate ways last September, and chief executive Ged Mason (son of founder Gerry) led a £54 million buy-back. Barclays only recouped its outlay, despite the fact that its cash had enabled the firm to grow turnover from £107 million to £235 million.

Still, it worked for the Mason family. Although they had to use every bit of capital they could lay their hands on, they still needed to borrow heavily to complete the deal. Within six months, however, Morson had managed to raise £36 million to pay off the debt, and the deal gave the business a higher capitalisation – on the first day of trading it was worth £72 million, but this had since climbed to £92 million when EN was going to press. Vitally, though, it also means the family once again owns a controlling stake, even if it is just fractionally over 50 per cent.

On admission to Aim in March, Mason said the firm would use some of the proceeds to make acquisitions. The first of these – a £2 million purchase of London-based Bluetec, took place in October.

19 Red Vision (sale) Value: up to £20 million

The BAFTA gongs for visual effects on film and television might hold pride of place in the reception area of Red Vision’s Canal Street offices but it was working together on a virtual horseracing game that has become the nation’s third most-popular gambling activity that led Inspired Gaming Group to make a bid for the company.

IGG purchased Red Vision in June following hot on the heels of a £108 million Aim placing that had enabled it to complete a reverse takeover of its parent, Leisure Link.

The deal is worth up to £20 million to Red Vision directors David Mousley, Pete Matelko, Pete Farrer and Steve Goldman – with £3.3 million up front and the remainder subject to a two-and-a-half year earn-out. The business last year turned over £3 million with profits in the region of £600-700,000.

All of the directors plan to stay on until at least the completion of the earnout. According to managing director David Mousley the deal has allowed Red Vision to “change gear without the jerk” and also made it easier for the two companies, which have worked together closely since 2000, to cross-refer clients without having to draw up complex legal agreements.

This will become increasingly important as broadcast technology converges with IGG’s broadband gaming capabilities. Mousley says that IGG was not the first company to make an offer for the business. IGG, for its part, is insistent that the deal won’t affect Red Vision’s award-winning television work.

Advisors: Altium, Halliwells.

20 Performance Products (sale) Value: up to £24 million

One of the hidden gems of the North West technology scene, Runcorn-based Performance Products has been around since 1979 providing bits of kit for cars, but it wasn’t until the firm began experimenting with radar devices to detect speed cameras in 1995 that it really got involved in electronics. Since then, it has honed and refined its devices to detect all kinds of speed cameras (it even points out common locations of all mobile van units). It updates locations every 24 hours, which are then sent remotely to subscribers’ devices. It has also produced its own GPS-enabled satellite navigation devices with the Snooper built in.

In October the company (which was owned by the Ballard family), was sold to US-based consumer electronics firm Cobra, which wanted a foothold in the European market. Cobra has certainly paid for the privilege. If the management team of Steven and Jason Ballard and Shaun Tolley, who have stayed with the business, meet the performance targets set out for them over the next two years, the outgoing shareholders could eventually receive up to £24 million.

Already, the upfront cash payments amount to £11.3 million: not bad at all for a firm which which only made a profit of £639,000 on an £8 million turnover in the year to March 2005. For his part, managing director Chris Ballard reckons the sale is a deal that suits everyone.

“This consolidation means that we can continue to invest in new product development, while continuing to provide the service our customers have come to expect,” he says.

Advisors: Cobbetts, Grant Thornton.

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