The corporate team of Birmingham law firm Martineau is celebrating the buyout of an historic Scottish spinner by a new Chinese client.
Todd & Duncan, which is Scotland’s last yarn spinner, was bought by Ningxia Zhongyin, one of China’s top suppliers of cashmere.
The Scottish firm is the spinning division of Dawson International and has top-level customers, including Chanel, Hermes and Dolce & Gabbana.
Martineau advised Ningxia Zhongyin throughout the deal after being introduced to the company through its association with Chinese law firm Jun He and its membership of Multilaw.
It said the deal had secured the future of the 140-year-old company, and protected hundreds of jobs.
Ningxia Zhongyin has been a major supplier of cashmere fibre to Todd & Duncan for the past five years and the buyout now takes it to the next level.
The law firm said the deal was a sign that foreign investors were keen to invest in heritage firms and companies with solid backgrounds, even in a recession.
Richard Underwood, corporate partner at Martineau, said: “We are delighted that, as a result of Martineau’s strong offering and vast experience across key focus area sectors, the firm was chosen to secure an international deal between China and Scotland. This latest deal demonstrates that international investment is still very much alive, with overseas investors such as Ningxia Zhongyin looking to capitalise on growth opportunities within the European marketplace when the economic upturn arrives.”
The deal was led by Martineau’s corporate finance team with key support from the intellectual property, commercial and employment, pensions and property teams.
The corporate division of Martineau has managed to keep deals going during the recession, albeit at a reduced rate.
Earlier this month it acted for Canadian firm Prism Medical in the £2 million acquisition of Test Valley Mobilitt and Saluss, two UK mobility equipment firms. It made the Ontario firm the No.1 company in its position in the UK equipment market, and boosted its dealership network.
But the economic downturn came as a blow to the corporate group, which saw one of its best years’ figures ever in 2008.
Although corporate activity had already started to slow down, the firm advised on deals worth more than £1.6 billion that year. But this was heavily influenced by the then-soaring private equity market, which has almost died away completely in recent months.
The past year has been a turbulent one for the firm as a whole, with profits dropping by almost a quarter in a year after the recession crippled the commercial side of business.
Martineau saw revenue shrink by nine per cent to £21.2 million, and profit per equity partner – the measure of profitability of law firms – dropped 24 per cent, with overall profits of £6.1 million.
Management at the firm said the drop in profits and turnover was broadly in line with their own predictions. They added that the change of focus the firm had gone through over the past year, to focus on more future-proof sectors, would put it in a good position going forward.
But the past year also saw a repositioning of the company. It changed its name from Martineau Johnson last summer, and it has recently announced the appointment of energy specialist Andrew Whitehead as new senior partner when incumbent Roger Blears leaves the position in the new year. The appointment of Mr Whitehead is widely seen as an acknowledgement of the importance of new sectors such as renewables.