2018 - a bumper year for M&A despite Brexit uncertainty

Despite the Brexit overhang, 2018 was another bumper year for the UK M&A market. According to Experian there were 7,539 deals announced in 2018, up 2.3% on the 7,369 transactions completed in 2017. This was the highest number of annual transactions ever recorded by Experian against a backdrop of political and economic uncertainty.

Deal activity across the Midlands remained relatively static compared to the previous year, with 977 deals announced versus 967 in 2017. Overall, total deal value fell by 1.8% to £18.2bn but it was 35% higher than the 2016 outcome. The Midlands was the third busiest region of the UK in 2018.

Just over 15% of deals in the region were financed via private equity, making it the second most common form of funding in the region. The 150 deals funded by private equity also represented a 34% increase in the number of private equity deals compared to 2017.

Bishopsgate finished the year strongly with the sale of an undisclosed manufacturing business to a listed Indian buyer and, in the last two weeks, completed on the sale of Davies Veterinary, Europe’s leading veterinary hospital to Mars Petcare. The midnight oil is being burnt in Stamford with several deals due to complete in the next 4 to 6 weeks; however, we have several projects “on hold” ready for launch as soon as the cloud lifts over Whitehall. When that will happen is anybody’s guess.

2017 – A Buoyant Year for Deals in the Midlands

According to Experian, the number of deals recorded in 2017 in the Midlands proved to be the second highest on record with more than 940 deals announced in 2017, second only to 2016's total of more than 1,000, while the value of those deals rose 21 per cent to more than £16.2bn.

2017 was at least 25 per cent higher than volumes recorded in 2015 despite a challenging political and economic climate with Brexit overshadowing cross-border activity.

During 2017 the Midlands featured in 13.4 per cent of all UK deals which represented six per cent of the total value, compared to 13.6 per cent of all deals in 2016 and 4.6 per cent of the total value. Manufacturing was the most active sector with 301 announced deals worth £5.1bn.

Looking at the prospects for 2018 the Bishop commented that “growth in the UK has proved remarkably resilient despite the lack of a coherent plan in Whitehall and deal activity for 2018 looks promising. Indeed, the Bishopsgate team seem to be burning the midnight oil in Stamford and have several deals set for completion in Q1 and Q2”