Aerospace and defence sectors are 'pretty damn hot'
Aerospace and defence has been earmarked as one of the highest growing sectors in terms of dealmaking. Peter McLintock, head of corporate at Squire Sanders Hammonds, told Insider the value of deals in the "huge but largely unrecognised" sector had almost doubled recently. Other West Midlands dealmakers pinpointed sectors including green energy and security as the ones to watch.
McLintock described aerospace and defence as "generally pretty damn hot".
He said: "It's a huge but largely unrecognised industry in the Midlands, even through about a third of all the UK businesses in the sector are based here. It's growing, despite the Ministry of Defence (MoD) cuts, because it's plugged into the world.
"The value of deals in the sector has risen by about half, partly because of the need to consolidate and partly because of the demands of technology which range from palmtops used by special forces to target attacks to systems that can jam missiles from hitting cars."
McLintock also said the IT division was one to watch. "For me IT is a star sector. I have at least one IT client who’s growing like topsy," he said. "You read all about public sector cutbacks but it still has £80bn worth of contracts to award, particularly in areas like IT. It’s so underrated."
Paul Franks, partner at Gresham Private Equity said the security sector was his growth field of choice.
"It's not just because of the unrest in the Middle East and Afghanistan," he said. "People and companies are always keen to improve their safety."
Green energy, including wave power, anaerobic - power from rotting vegetables - and solar, is also a popular sector among dealmakers.
Several dealmakers attributed the sector's early stages of development to its growing popularity. It is becoming a key government policy, which in turn attracts plenty of public grants and lots of private investment.
"Renewables aren't just a real growth area, they're almost recession proof," said Richard Cox, corporate partner at Browne Jacobson. "There are some great opportunities for deals and investment in the Midlands."
Mark Gibson, corporate partner at Cobbetts, added: "The government is continuing to throw decent money at this sector. However it's a slow burner, full of small companies which need a lot of capital investment. But, if you can build a business to a decent size, the chances are you can get hold of that money."
The full article can be read in the July issue of Midlands Business Insider.
