Fast-growth companies turning to alliances and joint ventures, says new research

Richard Masters, Pinsent Masons' partner and head of the Belfast corporate team

EUROPE'S fast-growth companies are turning to alliances, joint ventures and minority stakes to deliver rapid growth, according to new research from international law firm Pinsent Masons.

The report, entitled 'Pacesetters: How Europe's fastest-growing companies stay ahead of the pack', reveals that an average of 38 per cent of revenue growth in Europe's fastest growing companies over the last three years is attributable to M&A, whereas 62 per cent has resulted from organic growth and non-M&A activities.

Pinsent Masons' report drew its sample of 400 companies from the fastest-growing Western European-based companies evenly split across the following sectors: advanced manufacturing & technology, financial services, energy and infrastructure.

Alliances and joint ventures are the most cited factor among the 400 companies surveyed, with 40 per cent listing them in their top three most important drivers of growth over the last three years.

Some 82 per cent of the companies surveyed have acquired a minority stake in another company in the last three years. Nearly two thirds (65 per cent) have entered into licensing or franchising arrangements, and 60 per cent have embarked on an equity joint venture.

Richard Masters, partner and head of Pinsent Mason's Belfast corporate team, said: "Traditionally, businesses needing to get beyond organic growth have looked towards M&A, and activity in Northern Ireland would fit within that bracket.

"Locally, activity has been reasonably strong over the last six months, with our own team in Belfast advising Vinci Airports on the purchase of Belfast International Airport; Luxco's investment into Niche Drinks in the north west; and Textile Recycling International's acquisition of Cookstown Textile Recycling.

"But businesses here will be influenced by trends and dynamics elsewhere and the options for collaboration and alliance are much wider today.

"They often provide a means to experiment with innovation and transformation without making irrevocable decisions. This is all about seizing the best opportunities in a very broad landscape – and doing so with scale and speed."

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