Strong year for Midlands deals market, as M&A volumes reach their highest point this decade
23 November 2015
- Midlands deal volumes the highest outside London and the South East
- Deloitte completes £2bn worth of deals in the Midlands
- Consumer and financial services sectors are the most active
Deloitte’s financial advisory practice in the Midlands has completed over £2 billion worth of deals this year, leading them to predict that 2015 will be a record-breaking year for the team. The firm also reports an uplift in the value of transactions, with the average deal size now over £100m and a strong pipeline of further deal activity ahead.
The news follows publication of data from Experian showing 604 M&A deals in the Midlands in the first nine months of the year, up nearly 10% on the same period last year. Whilst the overall value of deals has fallen slightly, from £17.9bn last year to £16.9bn this year, 2014’s figures include the £9.1bn Alliance Boots deal.
Pauline Biddle, transaction services and Midlands practice senior partner at Deloitte in Birmingham, explains: “2015 is fast becoming a landmark year for dealmakers in the Midlands. We have seen a clear shift in the market with a greater number of large, as in £100m to £1bn, deals involving Midlands companies being led out of the region rather than London.
“This is testament to the improving profile of Birmingham, in particular, as a UK and global financial centre and also demonstrates the confidence of companies here and their willingness to look at those larger deals.”
Deloitte also pointed to the strong balance sheets of large corporates, extensive availability of debt and increasingly higher transaction multiples as key factors behind the changes.
Darren Boocock, corporate finance advisory partner in the Midlands, added: “Improving economic confidence and the desire of corporates to supplement organic growth with value-enhancing acquisitions has generated real momentum in M&A activity from strategic trade buyers. This trend has been gathering pace and corporate acquirers accounted for three quarters of the deals we have completed in the Midlands.
“That being said, Deloitte’s most recent CFO Survey indicates mounting uncertainty within the C-suite over the last quarter, due to weakness in emerging economies and volatility in global equity markets. If this translates to lower M&A activity, I can see a reversal in the trends, with private equity investors, supported by an accommodating debt environment, taking up the reins.”
Deloitte’s analysis highlighted the financial services and consumer sectors as the most active for deal activity in the Midlands so far this year.
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
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