Deal activity in Yorkshire and Humber soared in 2018

Deal activity within Yorkshire and Humber reached record levels during 2018, with 596 transactions reaching a value of just under £19bn for the 12-month period.

It was the best performance in both deal volume and transaction value recorded within the region over the last 10 years, according to the data published today by Experian. Yorkshire and Humber was one of only three UK regions to see strong year on year growth in both the volume and value of deals.

Experian said that looking at a year-on-year perspective, transactions were up 19% from the 499 announced during 2017, whilst the value of the deals “spiked sharply” from 2017, when transactions reached £4.9bn.

Yorkshire and Humber-based companies were involved in 7.9% of all UK deals, and contributed 5.1% to their total value over the year.

Experian said: “There were many high-profile acquisitions announced in Yorkshire and Humber in 2018, the largest of which was Sainsbury’s combination with Asda Stores Ltd, the Leeds-based UK retail subsidiary of Wal-Mart Stores.”

The £7.3bn transaction – the largest ever in the UK food retail industry – is currently under investigation by the Competition and Markets Authority.

The second largest deal within the region saw Canadian-based gaming and online betting company Stars Group, agree to acquire Leeds-based Bonne Terre (also known as Sky Betting and Gaming), for just under £3.4bn.

Manufacturing (192), wholesale and retail (186) and professional services (138) occupied the podium positions in the industry sectors; accounting for a combined percentage of almost 87% of all deals recorded within the region. Only three sectors recorded a fall in the percentage of deals announced year on year– support services, hospitality and arts and entertainment.

Experian added: “Financial services also reported a healthy increase over the 12-month period with deals values increasing from £1.4bn to £9.9bn this year; buoyed somewhat by the Clydesdale and Yorkshire Bank Group (CYBG) acquiring Virgin Money Holdings, for £1.7bn – the largest banking transaction recorded in the UK during 2018.”

Where funding arrangements were disclosed, around 18% of transactions were financed by new bank debt. In addition, debt funded deals were up year-on-year by approximately 44% (from 73 to 105). Both management and investor buy-outs also increased from the previous year’s figures, with a rise of 19% and 27%, respectively.

Gibson Dunn & Crutcher – acting on behalf of Wal-Mart and Stars Group – was at the top of the legal value rankings, having advised on those two deals for a combined consideration of approximately £10.7bn.

The top ranked legal advisers by volume were Gateley and Clarion Solicitors, each involved in 27 Yorkshire & Humber transactions in 2018. In the financial standings, RSM was top having been cited in 28 deals, some way ahead of Hazlewoods in second position, which participated in 19 transactions.

Morgan Stanley and Rothschild were first and second in the region’s value rankings, advising on transactions valued at £10.2bn and £8.5bn.

There were 82 deals announced in the small value segment in 2018, a 17% decrease on the 99 small transactions announced during 2017. This was reflected in the value of transactions falling by 26% (from £303m to £225m).

Activity was up 40% in the mid-market; 66 medium-sized deals were announced, up from 47 the previous year, whilst the total value of deals was up almost 36% to £1.9bn.

Deal volumes slowed at the higher end of the market. There were seven large transactions recorded which were valued at £2.3bn. This was down from the corresponding period in 2017, when 12 deals were announced for a total of almost £3.2bn.

Five mega transactions were announced within the region, with the value of those deals just under £14.6bn – these were all announced during the first half of 2018.

Experian data

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