PE acquisitions stabilise after market turbulence, say Rickitt Mitchell
The number of acquisitions made by private equity-backed businesses across the UK shown signs of stabilising after a buoyant period, according to Rickitt Mitchell’s Buy and Build Barometer.
The latest analysis from the corporate finance firm, conducted in partnership with Experian Market iQ, reveals 125 deals were completed in Q3 2021, down 25 % on the second quarter of the year. Bolt-on transactions had hit a record high in Q1 2021, with 196 completed at a value of £2.3bn.
In the regions, the South East (16), East of England and London (both 14) continue to be the best performing areas for dealmaking, while Yorkshire is outperforming the rest of the Northern regions with 11 transactions completed during Q3) – a record amount for the area.
Figures from the Buy and Build Barometer suggest that deal values accumulated this year have also followed a similar trend, with Q3 figures decreasing by 75% to £235m from £943m in Q2 2021. While the number of transactions completed reflects the same number of bolt-on deals as in Q2 2020, the value of the deals has retracted year-on-year by 25% from £313m.
Among the standout transactions completed in Q3 were the £145m acquisition of a 90% stake in Pimlico Plumbers by US-based Neighborly Inc in September, and the £75m acquisition of Leeds-based Smoothwall Ltd by Australian firm Family Zone Cyber Safety in August. Both deals are a representation of the increased interest in cross-border deals, with deals completed involving UK, European, American and Australian firms during the third quarter of the year.
Neil Mitchell, partner at Rickitt Mitchell, said: “While it remains a record year so far in terms of deal activity, a steading of transaction flow has emerged as expected following a boom earlier in the year, as the market recovers from the impact of Covid-19.
“Despite a slowdown compared to Q1 and Q2, Q3 transaction levels remain high, especially in comparison to the number of deals completed in 2019 and 2020. Activity also continues to move outside of London, with a particular surge in Yorkshire. This is further evidenced by the number of cross-border deals involving firms from Europe, Australia and North America.”
Founded in 1976, Rickitt Mitchell is an independent corporate finance firm based in Manchester. Over the last 40 years, the firm has advised on more than £4bn worth of transactions across all deal types, ranging from £10m to over £100m in value.
