Record levels of buy and build activity by Northern private equity-backed businesses

The number of acquisitions made by private equity backed businesses in the North hit record levels in the first quarter of 2021, with 25 transactions completed in just three months, according to Rickitt Mitchell’s Buy and Build Barometer.
Neil Mitchell, a partner at Rickitt Mitchell,Neil Mitchell, a partner at Rickitt Mitchell,
Neil Mitchell, a partner at Rickitt Mitchell,

The latest analysis from the corporate finance firm, conducted in partnership with Experian Market iQ, reveals a 56 per cent rise in the figures seen in the corresponding quarter last year. The first quarter of 2020 saw 16 deals completed, before the first Covid-19 lockdown, with the latest figures more than double the 11 deals in Q1 2019.

Transactions completed during the first quarter include the £14.7m acquisition of Salford-based Starcom Technologies by Node4 Ltd, Leeds-based broadband provider Liberatis’ purchase of Vision Fibre Media, and the sale of cell-line control manufacturer HistoCyte Laboratories, headquartered in Newcastle, by Sweden-based research organisation Atlas Antibodies.

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A spokesman said: “Northern-based companies demonstrated appetite for overseas acquisitions, with nine cross border transactions completed during the first three months of 2021, representing 36 per cent of all deals. The US was most attractive, with three deals finalised, followed by two in Sweden, and one in each of Norway, Germany, Canada and India.”

This growth was also reflected nationally, with 168 transactions completed across the UK – a rise of 85 per cent on the first quarter of 2020.

Neil Mitchell a partner at Rickitt Mitchell, said: “The start of 2021 has seen record levels of buy and build activity by Northern private equity-backed businesses, who have learned from previous economic downturns that there is a real opportunity to generate value as the economy recovers.

“The dealmaking environment is also aided by acquirers having access to more liquidity, as well as sellers setting more sensible valuations.”

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Mr Mitchell added: “It will be interesting to see how appetite evolves over the coming months, especially as we progress through the Government’s roadmap out of lockdown.

“We still expect to see private-equity backed companies targeting overseas bolt-on transactions, in order to drive returns, taking advantage of the current optionality and liquidity within the UK debt markets.”

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