Accountancy and business advisory firm BDO LLP advised on 40 deals in the Midlands in 2023, with a combined value of £1.68 billion. More than a third of all BDO’s activity in the region (36%) involved private equity.
BDO’s most active sectors continue to reflect wider market trends, with TMT, support services and financial services leading the way, in terms of volume and value. Combined, they accounted for 55% of deals completed by the firm in the Midlands, making up 62% of the total value.
The industrials market also continues to perform well both locally and globally – driven by market dynamics and the sustainability agenda. Sales to overseas corporates was a strong feature in this market with standout deals including the sale of Syrinix to Badger Meter Inc – a listed, US-based provider of water flow and measurement solutions.
Roger Buckley, corporate finance partner at BDO, said: “At BDO, we speak to many buyers and investors with cash and appetite and, compared to the beginning of 2023, we are now seeing closer convergence of buyer and vendor price expectations.
“Despite a stagnation at the upper end of the market, significant opportunities remain, particularly in the lower and mid-markets which have continued to transact at volume.
“There’s no doubt that world events will continue to cast a shadow and more economic and/or political shocks could well materialise. Plus, we have the UK and US elections and potential changes to capital gains tax to factor in in the months ahead.”
Standout deals in the region in 2023 included the acquisition of Hydraulic Authority I Limited by international, multi-brand franchisor, Franchise Brands plc; the sale of TLO Risk Services to Specialist Risk Group; and the investment by Perwyn in iamsold, a market leading proptech business.
Ben Dawson, M&A director at BDO, said: “With greater stability in the debt markets and the cost of capital on the way down, we foresee a rise in deal activity through 2024.
“There is no shortage of liquidity in the corporate and PE universe and there are plenty of owners and management teams looking for a liquidity event, with the gap in valuation expectations gradually closing.
“At BDO, we’re certainly enthused by the number of businesses that we’re speaking to that want to raise money or exit in the next 12 months, with the volume and quality of conversations much higher than it has been during the second half of 2023.”
