Plimsoll Reports Suggest Acquisition “Opportunity”
Plimsoll analysts have announced a new report suggesting that the UK tyres, exhausts and batteries industry is rife with opportunity, despite a record number of companies losing money, and overall business values plummeting to the extent that almost half are now worth less than half their value of 12 months ago. The new study suggests that the current economic downturn represents “one of the biggest opportunities in a generation, if you have the courage and the capital.”
The study rates each of the UK’s leading 1,000 tyres, exhausts and batteries companies on their acquisition attractiveness, finding 103 companies “ripe for the picking” based on a combined scoring system incorporating overall financial strength, ownership, valuation and future potential. These 103 companies are all privately owned, yet are showing a serious deterioration in the financial performance. Given the reluctance of the banks to lend more, their time, money and options are running out.
David Pattison, senior analyst at Plimsoll, explains the results, “What we have indentified here is a group of ‘wounded animals’, many of these businesses have a long and distinguished history, yet their recent performance has deteriorated. By definition these are classic acquisitions. Anyone looking to grow their own company through acquisition should be looking for businesses that are currently undervalued yet, with help, can be turned around.” However, as Pattison points out, “this will not be easy. Many will need rapid and deep cost cutting to get them back on a firm financial footing. We could see as many as 3000 jobs go over the next 12 to 24 months as these companies shrink to ensure their survival.”
Despite this dour prediction Pattison sees a massive opportunity in the segment: “The current market conditions have presented an unprecedented set of opportunities to buy into a business that even a year ago would have been unaffordable. We know of at least 449 companies within the industry, who have the cash to spend and could aid these 103 ailing businesses and ensure their survival.”
The full analysis is available now, and Plimsoll promises that it “will help anyone in the industry, not only those looking to snap up a cheap acquisition, but also those looking for an investor, buyer to help target those with cash to spend.”