The North East saw the biggest drop in deals volume of all UK regions and nations last year, new figures have shown.
Data from Experian shows the region saw a 29% fall in the number of mergers and acquisitions, from 383 to 273 last year. The value of deals fell by 44% to £2.04bn, ranking as the seventh largest drop.
Authors of the Experian MarketIQ: 2023 report say that after several years of growth, the mergers and acquisitions market in the region fell to its most subdued level since 2017. It pointed to inflation and interest rate hikes as factors which hampered deal making.
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But the research shows activity picked up as the year progressed, with the final quarter being the busiest of the 12 months with 76 transactions. Four of the year’s six largest deals came in that period, including the largest, the £823m acquisition of County Durham-based Banks Renewables by Canadian asset investors Brookfield and the third largest, semiconductor manufacturer Pragmatic’s raising of £182m Series D funding led by M&G’s Catalyst and the UK Infrastructure Bank with participating from NorthernGritstone, Latitude and MVolution Partners, and existing backers such as British Patient Capital, Cambridge Innovation Capital and Prosperity7Ventures.
In second place came the £260m buyout of Equans Urban Energy Ltd by Swiss Life Asset Management AG; in fourth place was the £164m acquisition of the measurement solutions business of TechnipFMC by One Equity Partners, and fifth largest was the £100m fundraise for Atom Bank, featuring existing shareholders.
Acquisitions dominated the deal type, accounting for around 60% of all activity in the North East but down 24% year-on-year. There was a marked upturn in management buyouts, which increased 14% on 2022’s total and growth in private equity buy-outs.
Professional services was the most active sector with 84 transactions, which was consistent with 2022’s figures. Meanwhile manufacturing deals were down by around 31%.
And debt-funded transactions fell by 50% during the year as did private equity funded deals which fell 35%. HSBC was the most active provider of debt finance while the North East Fund, supported by the European Regional Development Fund, was the most active investors.
The region’s top legal adviser was Mincoffs, which moved up from third place in 2022, with 33 transactions, and closely followed by Muckle with 32 deals. Paul Hughes, senior partner and head of corporate at Mincoffs, said: “Being named the North East’s most active deal adviser across the year is an accolade we are extremely proud of and it is an excellent result for the team.
“In 2023 we celebrated 75 years of Mincoffs, welcomed new members to the team and a string of new clients, so this ranking is a brilliant way to top off what was already a fantastic year. Providing a first class service is always a top priority and we look forward to continuing to deliver successful results for our clients across 2024.”
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