Yorkshire businesses eyeing M&A opportunities as 2024 progresses: Barry Jackson

The fact is, despite the persistent economic headwinds, there is still plenty of appetite in the region to get deals done, particularly amongst ambitious businesses that are well positioned to weather this period of flux.

We saw that in action throughout 2023, with BGF investing in seven new Yorkshire and North East companies throughout the year.

Each one demonstrated that dynamic, well-capitalised companies are well positioned to seize opportunities and manage challenges ahead in a measured way.

As an investor, it all boils down to having confidence in the prospects of the growth economy and supporting innovative and exciting businesses to achieve their full potential and deliver consistent returns for shareholders.

Our patient approach to investment enables us to form minority partnerships through which we can adopt variable time horizons and structuring, and provide follow-on funding that allows us to confidently invest through the cycle – something which is essential in the current climate.

The good news is that we are already seeing a strong pipeline of deals coming through in the first quarter of 2024 – whether that’s new investments, follow-on funding to drive further growth, or successful exits that prove that our investment thesis is the right one.

Activity is being driven in part by the issue of raising capital, which has been a real sticking point over the last few months, with the cost of lending increasing substantially.

Unsurprisingly, this has led to an increase in companies exploring minority equity deals.

BGF’s unique balance sheet investment model means that we are well positioned to form long-term partnerships with companies and support them over time as they grow.

As with any new beginning, it’s important to start on the right footing and set the tone for the year ahead. Given the level of activity we have seen in the region in 2023 – with deal volumes generally remaining relatively steady, particularly in the smaller end of the market – we are positive about the M&A market in 2024.

We are hopeful that lowering inflation and stable interest rates will help to ease many of the challenges and concerns being felt by regional businesses.

The majority of businesses continue to face a challenging economic environment, and growth businesses are no different.

However, Yorkshire, and the North as a whole, has an incredibly strong entrepreneurial history, and that bedrock of robust businesses ensures that there will always be a healthy flow of M&A opportunity as founders go in search of growth and investment capital, or look to realise their investment.

That’s why the current market conditions present an opportunity, particularly for investors that are willing to fund promising businesses with limited access to capital.

If 2023 taught us anything, it’s to look beyond the doom and gloom, and see the potential that exists in abundance across the North.

Barry Jackson is Head of BGF in Yorkshire