South East deal volume down by 21 per cent as values soar

A total of 739 deals were completed so far this year representing a decrease of just under 21 per cent compared to last year.

The Quarter 3 Experian United Kingdom and Republic of Ireland M&A Review, however, showed that deal values have soared, reaching £26.2bn, up from a more modest £9bn in the same period last year.

This surge in value can be directly attributed to an increase in high value mega deals rising from one recorded last year to seven so far this year.

Acquisitions were the driving force behind activity, accounting for 74 per cent  of the total volume.

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Whilst this represented 20 per cent fewer than last year, the overall market trend of “volume down and value up” was evident, with recorded value increasing from £3.3bn last year to just over £15bn for the year to date.

The South East’s deal activity accounted for 16 per cent of the UK’s total volume and 13 per cent  of the total value

Among the most significant deals in Q3 are Pfizer’s disposal of 640m shares in Haleon at 380p per share, raising £2.43bn, with Haleon also buying back a further 60.5m shares from Pfizer at the same price.

The sale by Pfizer is part of its broader strategy to gradually reduce its stake in Haleon, the consumer healthcare business spun out of GSK in 2022

Another major deal saw AngloGold Ashanti acquire Centamin for £1.9bn, positioning AngloGold as the fourth largest gold producer globally.

The communications sector also witnessed significant activity, with Global Infrastructure Partners and KKR acquiring an additional 10% stake in Vantage Towers from Vodafone Group for £1.1bn.

Additionally, the acquisition of Ti Fluid Systems by ABC Technologies for £379m underscores the ongoing consolidation in the automotive industry.

Where funding structures were disclosed, deals funded by cash have seen a substantial increase in value, rising from £6.9m to £24bn, despite a decline in volume of just over 37 per cent.

Bank debt also showed a notable rise in value, up to £8.6bn from £565m last year, even though volume decreased by 36 per cent, reflecting a preference for leveraging debt for high-value transactions.

Alternative lender ThinCats proved to be the lender of choice for businesses in the region, with nine deals supported, followed by HSBC with five deals and Triple Point on four.

Venture capital and private equity funding experienced a significant decline in both volume and value, down by 28.9 per cent  and 53.1 per cent, respectively, indicating a more cautious approach from investors.

Despite this, a wide and varied range of investors have targeted the growth potential of the regions’ businesses, with Apax Partners and Oxford Science Enterprises leading the way, each involved in seven deals, with YFM Equity Partners on six.

TOP FIVE DEALS IN THE SOUTH EAST 

1 - £6.8bn

Date: 28/02/2024

Deal Type: Acquisition

Target: Vodafone Italy (from Vodafone Group Plc, Newbury)

Bidder: Swisscom AG, Switzerland

2 - £3.4bn

Date: 18/03/2024

Deal Type: Share Buy-Back

Target: Vodafone Group Plc, Newbury

3 - £2.4bn

Date: 30/09/2024

Deal Type: Divestment

Target: Haleon Plc, Weybridge (from Pfizer Inc, USA)

4 - £1.9bn

Date: 10/09/2024

Deal Type: Acquisition

Target: Centamin Plc, Jersey

Bidder: Anglogold Ashanti Plc, Staines-upon-Thames

5 - £1.4bn

Date: 19/06/2024

Deal Type: Divestment

Target: Indus Towers Ltd, India (from Vodafone Group Plc, Newbury)

Legal Adviser Rankings by Deal Volume (Top 10):

1 - Harrison Clark Rickerbys – 40 deals

2 - Shoosmiths – 27 deals

3 - Clarke Willmott – 22 deals

4 - Freeths – 21 deals

5 - Pinsent Masons – 17 deals

6 - Addleshaw Goddard – 16 deals

7 - Stevens & Bolton – 13 deals

8 - Eversheds Sutherland – 10 deals

9 - Gateley – 9 deals

10 - CMS – 8 deals

Financial Adviser Rankings by Deal Volume (Top 10):

1 - K3 Capital Group – 55 deals

2 - RSM – 22 deals

3 - Grant Thornton – 20 deals

4 - Cavendish – 14 deals

5 - Cooper Parry – 14 deals

6 - BDO – 13 deals

7 - James Cowper Kreston – 12 deals

8 - Azets – 12 deals

9 - Hazlewoods – 11 deals

10 - Benchmark International – 10 deals