South West sees 26% decline in deals last year - report

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Giles Gwinnett

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Deal making volume declined in the South West last year by 26% but there was a resurgence of alternative deal types such as buy-outs, according to the latest merger and acquisition (M&A) review from experian.

The region saw a total of 539 deals in 2023 (2022:730), a decline of 26%. These were valued at £3.4bn, down from £4.9 billion in 2022 - a 32% drop.

The report's authors noted though that the region's 2023 deal volume had been "roughly in line" with previous yearly totals since 2021 and 2022 had been "outliers" due partly to "pent up demand" following the pandemic and due to veterinary group Independent Vetcare buying 288 practices between 2021 and 2022 - a spree, which had not continued into 2023.

The South West region saw the fifth largest deal volume in 2023 from across the whole of the UK and Ireland, following Greater London, the South East, Midlands and the North West.

"There was diminished activity across all value segments, with small deals dropping by 22% and mid-cap deals falling by 31%," noted the report.

"Large deals also fell, to eight transactions from 15 recorded in 2022, while mega deals were again noticeable by their absence."

By industry, professional services retained its top position as the most active sector in the South West with 145 transactions, despite a 44% decline in deal volume.

Construction deals rose by 11%, to 62 for the year, valued at £662 million, while the support services sector increased by 12%, to 76 deals during 2023, the report showed.

Meanwhile, the experian report showed "strong activity" in the buy-out space, with the number of deals up to 18 last year from 11 in 2022, mainly targeting companies in the small to mid-market.

But there was an overall drop in the volume of deals funded by private equity, to 88 in 2023 from 113 in 2022.

The biggest deal of last year was Wellness Unity's acquisition of Civitas Social Housing for £485 million, while the second largest was Bristol-based Heather Global's purchase of Impellam Group for £483 million.

Meanwhile, public companies in the South West were more active in raising funds, with almost double the volume of rights-issues recorded last year.

The value of these has also soared in 2023, up to £427m from £100m last year, said the report, while the South West accounted for 8% of UK deal volume and 2% of value

For the full report, click HERE.

Giles Gwinnett

Giles Gwinnett is a writer at The Business Magazine. He has been a journalist for more than 20 years and covered a vast array of topics at a range of media settings - in print and online. After his NCTJ newspaper training, he became a reporter in Hampshire before moving to a news agency in Gloucestershire. In recent years, he has been covering the financial markets along with company news for an investor-focused web portal. His many interests include politics, energy and the environment. He lives in Dorset.