2022 marked a subdued year for deals in Yorkshire and Humber, with deal making within the region stabilising following initial bounce-back figures generated post-Covid in 2021.
Amidst challenging conditions, according to Experian’s M&A review, the number of recorded transactions reached 615, down 7% from the 660 recorded for 2021. Meanwhile transaction value plummeted from £17.7bn to £8.1bn, a 54% contraction.
Activity in all deal ranges struggled to keep pace with 2021 – small transaction values dropped from £323m to £319m (despite deal volume increasing from 103 to 125), mid-market deals fell sharply from £1.8bn to £1.2bn and there were only 12 large deals announced for a combined consideration of £4.2bn (again, down from the previous year’s figures of 14 valued at £5.8bn).
Yorkshire and Humber-based companies were involved in around 9% of all UK deals in 2022 and contributed 4% to their total value.
All of the top ten deals announced in the Yorkshire and Humber region were acquisitions, two of which managed to break through the £1bn barrier. The largest of these saw UnitedHealth Group, the US multinational managed healthcare and insurance company reach an agreement on the terms of a recommended offer to acquire EMIS Group, a Leeds-based supplier of healthcare software and related services to GPs.
The offer, made back in June 2022 at 1,925p per share in cash, values the company at just over £1.2bn, and is currently the subject of an investigation by the UK Government Competition and Markets Authority. Should the merger complete, it is expected that EMIS’ shares will delist from the Alternative Investment Market of the London Stock Exchange.
The other transaction to exceed £1bn saw the Delek Group, an Israeli energy and infrastructure conglomerate, close a deal in July to acquire Siccar Point Energy (Holdings), registered in Leeds, an oil and gas company with resources in the North Sea, for a consideration that may rise to £1.2bn in cash.
Manufacturing remained the most active sector in the Yorkshire and Humber region, according to Experian, with 180 transactions in 2022, ahead of wholesale and retail (165 deals) and professional services (131). Most sectors saw activity decline year on year, whilst the health, hospitality and waste management sectors were the only industries to report year-on-year growth.
Financial services and wholesale and retail led the way by deal values, with both breaking through the £3bn barrier. However, the biggest rise in growth was in the hospitality sector (up to £224m) – this was largely driven by Sun Communities’, a US real estate investment trust focused on the acquisition and operation of manufactured home and recreational vehicle communities, acquisition of Park Leisure 2000, the York-based operator of premium holiday parks across the UK, from investment firm Midlothian Capital Partners and a consortium of investors, for an enterprise value of £182m.
Where detailed funding arrangements were disclosed, Experian recorded a total of 64 transactions that were funded at least in part via new bank debt; down from 66 for the same period in 2021.
ThinCats was the region’s most active lender last year, providing funding for 13 transactions, ahead of HSBC and Shawbrook Bank, providers of finance for eight and six deals, respectively.
The year witnessed a dip in those deals where private equity acted as a source of funding. Having been involved in 113 transactions in 2021, the number of deals funded via venture capital dropped to 95 – the value of those deals plunged to £245m (down from £11.5bn last year).
The Northern Powerhouse Investment Fund (NPIF), which combines funding from
the UK Government, European Regional Development Fund, British Business Bank and European Investment Bank, was the lead capital investor, providing equity financing for nine transactions with a combined valuation of over £24m.
