Midlands completes highest value of M&A deals since 2012
Experian’s M&A report for 2021 revealed the Midlands was the UK’s busiest region for deal-making outside of London and the South East, with involvement in 14.7% of all UK deals.
There was an 18% increase in deal volume from 2020 with the values of these deals the highest they have been since 2012 with a total of £21.5bn.
Last year saw the region’s largest IPO being completed when Dr Martens commenced trading on the main market of the LSE. It raised £1.3bn for private equity owner Permira, which sold down part of its stake.
The largest transaction, however, was Parker-Hannifin’s £6.3bn acquisition of Meggitt an engineering firm that designs and manufactures for the aerospace, defence and electronics markets. The mega-deal is due to be complete sometime in Q3 2022.
Manufacturing was the most active industry in the Midlands M&A market with 302 transactions. Whilst the real estate sector only recorded 40 transactions, in comparison to 96 in 2020. Experian suggested this was due to organisations looking to embrace flexible working as businesses and customers were hit with restrictions.
Dominic Parker, of Experian Market IQ said: “After many businesses postponed acquisition plans in 2020, deal-making in the Midlands bounced back from the effects of the pandemic last year.
“Our new figures, derived from the Corpfin global M&A database, show that 2021 ranked as one of the region’s busiest ever years. Activity was fueled by a booming private equity sector and high levels of overseas interest in Midlands firms – with companies in the region’s highly-skilled engineering and manufacturing sectors a particular target for investment – and deal values soared.
“Whether quite this level of deal-making will be sustained remains to be seen, but the funding environment remains positive and the region’s corporate advisory firms report strong pipelines of business, raising hopes of another strong year as we move further into 2022.”
The report revealed that acquisitions were again the most popular deal type in the Midlands, with a total of 707 transactions worth £7.2bn but a new trend emerged showing employee buy-out group acquisition numbers quadrupled from 3 in 2020 to 12 with a combined value of £31m.
The number of early-stage investments was down by over 26% on a year on year basis, but this was set against a 75% increase in outright investor buy-outs and an 11% rise in the number of management buy-outs.
Grant Thornton was top of the Midlands financial advisers ranking with a total of 60 transactions, followed by K3 Capital with 55 and RSM assisting on 48 deals.
