Pictured above: Malcolm Cook

More West Midlands companies - many acquired on the cheap - are going to follow Cadbury into the hands of foreigners, an expert has warned.

Malcolm Cook, a partner at the Birmingham office of accountants and business advisers PKF, described it as "a good time to be buying in the UK".

His comments are sure to spark further concern for the region's manufacturing base while renewing job fears.

US food giant Kraft says its £11.7 billion deal to acquire Cadbury would create "global confectionery leader".  But pundits believe job cuts are now likely at Cadbury's UK operations perhaps including its historic Bournville factory.

Mr Cook's comments came in PKF's Deal Drivers report produced in association with researchers mergermarket.

He predicted: "There will be a number of attractive businesses in the Midlands that are going to be coming up for sale in the course of 2010. It is still very early days but I would expect there to be interesting firms on the market which could attract the attention of foreign buyers.

"These sales are not necessarily the result of distressed factors but by drivers such as advantageous currency exchanges for foreign buyers. The current foreign exchange environment has made a UK-based acquisition highly advantageous. It's a good time to be buying in the UK."

Sectors to look out for in the Midlands included distribution, logistics and healthcare, as well as education and energy.

Mr Cook said the region's more dominant manufacturing, engineering, construction and auto-related industries had been hit hard.

2009 had been an annus horribilis but activity was beginning to pick up.

"Lack of clarity with regards to the overall economic environment and how it would develop; trading performance; the way banks would go forward; and, more recently, the political environment, meant businesses have been internally focused and so shied away from M&A activity," Mr Cook said.

Businesses had experienced "sufficient support" from banks with a surprising lack of distressed-driven deals. However, that support only extended as far as not calling in loans and holding off on covenant breaches. "Financing was still difficult to obtain for regional businesses," he added.

Nevertheless, Mr Cook said he was "fundamentally optimistic".

He continued: "That optimism is driven by a number of factors, but largely because we are seeing banks opening up and lending taking place again.

"Going forward, the sweet spot in terms of deal values in the Midlands will continue to be in the £25 million range."

The analysis was backed by the wider UK report.

It stated: "Banks could become more aggressive with regards to the loans that they have provided as the economy improves and the value of underlying security follows.

This will likely increase the financial pressure on businesses and could hasten a wave of distressed situations.

"Nevertheless, aggregated valuations in the third and fourth quarter of the past year give cause for confidence and while no one is quite ready to say 'all is well again', the consensus is that while the effects of the crisis will continue to be felt, businesses that are fundamentally sound and have survived thus far will make it through the downturn.

"Firms are coming out of their retreat and eager to take advantage of the opportunities that are available to them. While there are still challenges facing UK-based businesses, the market is clearly on the road to recovery."