Fewer private equity deals were secured across Yorkshire and Humber last year, in what has been called a tough market.
Research from the Centre for Private Equity and Management Buy Out Research (CMBOR), based at Nottingham University Business School and sponsored by investors Equistone Partners Europe, showed 14 deals across the region, down 22% on the 2022 figures. Deal value also dropped by roughly the same proportion, to £447m - its lowest point in a decade.
It is the second yearly fall for deals volume across Yorkshire and Humber but sector experts have indicated this year could bring a bounce. Activity picked up in the second half of the year, with eight deals completed in the second half versus six in the first half. But those deals represented a significant drop in average value, from £43.3m to £13.3m.
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Equistone's own acquisition of Pudsey-based vehicle rental firm Nexus dominated the 2023 figures, contributing 34% of the deal value whilst Capita's decision to sell its 75% stake in sustainable food firm Fera Science in the second part of the year accounted for 74.7% of deal value in H2.
More broadly, the data revealed the North of England was the UK's most active area outside of London. However, values were still well behind the capital at £1.6bn across the north versus £5.4bn.
Sebastien Leusch, investment director at Equistone Partners Europe, said: “Despite what has been another slow year for private equity activity both in Yorkshire and the Humber, nationally and across Europe, there’s good reason to feel optimistic as we head into 2024. Just as a sluggish pandemic year led to a record 2021, we’re seeing the similar effects of pent up demand in 2023 as management teams and investors have focused on building relationships and carrying out due diligence over the course of the year.
"Stubborn macroeconomic headwinds and rising interest rates have impacted the markets on a pan-European level, which has been felt acutely here in Yorkshire and the Humber. However, we’re beginning to see some stability return, indicated by the increase in deal and adviser pitching activity in H2, helping businesses to make more informed decisions.
“While for many 2023 has felt like a pause for breath, the mid-market remains robust, with a number of strong management teams looking for investment across the region. We’re expecting to see a number of attractive deals come to fruition in 2024, so there’s plenty to be optimistic about in the New Year.”
