Friday, October 22, 2021

Yorkshire deal activity continues to grow

The growth in deal activity within the Yorkshire and Humber region continued well into the second quarter of 2021, according to Experian’s H1 M&A Review.

Deal volumes, which were up almost 20% in Q1, reached 337 in the first half of 2021 – a 34% increase on a year on year basis. This was the second highest number announced for the first six months within the last decade (second only to the 344 transactions recorded in the first half of 2019).

The positivity in deal numbers was reflected in transaction values which rose to just over £1.7bn (up from £1.6bn in the corresponding period last year). Yorkshire and Humber-based companies were involved in 10% of all UK deals in H1 2021 and contributed 1% to their total value.

There was very little change by way of the top ranked deals from Q1 into the second quarter of 2021. Acquisitions once again dominated; the largest of these saw Drax Group, a Selby-based electrical power generation company, close a deal to acquire Pinnacle
Renewable Energy, a Canadian producer and supplier of sustainable biomass, for £423m including debt.

This was some way ahead of the next most notable transaction which saw Doncaster-based Genuit Group (formerly known as Polypipe Group), one of Europe’s largest manufacturers of piping, underfloor heating and energy efficient ventilation, acquire London TopCo (trading as ADEY), a Cheltenham-based provider of magnetic filters, chemicals and related products, from exiting investor LDC in a £210m all-cash transaction.

Manufacturing remains the most active sector in the Yorkshire and Humber region with 102 transactions so far in 2021, ahead of professional services (85 deals) and wholesale and retail (76). These sectors, along with infocomms, support services, construction, financial
services, health, transport and hospitality all reported double-digit growth in deal numbers for H1 2021.

The education sector exceeded those numbers year on year, with triple-digit growth of 167% (from three deals in 2020 to eight in 2021). In respect of transaction values,
manufacturing (where deals worth £989m were recorded) was the highest by industry sector – over double the next highest, which was utilities with £487m.

It is also important to highlight the infocomms industry; the largest investor buy-out transaction saw US private equity firm Great Hill Partners acquire a majority stake in BigChange Group, a Leeds-based developer of mobile applications to help companies plan, manage, schedule and track mobile workforces and transport operations, for £75m. This deal was a major contributing factor in infocomms values increasing from £95m to £246m.

Where detailed funding arrangements were disclosed, Experian recorded a total of 32 transactions that were funded by new bank debt; down from 34 for the same period
in 2020. HSBC was the region’s most active lender so far providing funding for five transactions, just ahead of ThinCats and Caple, which funded four and three deals,

Private equity has again been a prominent source of funding in the region having been involved in 63 transactions so far this year, making it the second most common source of funding for new deals behind cash (121).

Whilst the number of deals funded via private equity has increased (from 40 last year), there has been a decrease in the value of those deals from £229m to just over £205m. The Future Fund, a government scheme to support UK-based companies, was the lead capital
investor providing equity financing on four transactions for a combined consideration just short of £18m.

K3 Capital Group has been the most active financial adviser so far in 2021 having advised on 17 transactions – just ahead of BHP Corporate Finance and RSM on 14 and 13 deals, respectively. RBC Capital Markets was the lead financial adviser by value, advising on a single transaction for £423m – acting for Pinnacle Renewable Energy in its acquisition by Drax.

Squire Patton Boggs were at the top of the legal value rankings, having provided advice
on deals for an aggregate consideration of £288m, while Clarion Solicitors led the volume ranking with 24 qualifying deals – Schofield Sweeney (18) and Squire Patton Boggs (17) made up the top three.

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemichaving a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £31.50 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.

Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.