Highlights

Positively, Q4 2019 brought about an end to the decline of deal volumes that persisted throughout the year. Following the voting in of a majority government in December, the uptick in late quarter deal activity showed that both buyers and sellers were looking to make up ground following the lengthy period of Brexit and political uncertainty. Where the number of buyouts across the UK was down slightly on Q4 2018 levels (approximately 9%), the Consumer and Industrials sectors experienced a slight uptick in deal volume. Comparatively, mid-market buyouts in the Services and TMT sectors were down on the previous year, indicative of fewer quality assets coming to market in the UK.

Despite deal volumes for Q4 2019 being lower than previous years, investor appetite for high quality UK deals remained. A number of larger mid-market deals, especially in the Industrial Products and Services sector, were completed ahead of process timetable and competitive tensions were certainly high given dry powder volumes. Given that PE exits are expected to increase following a definitive outcome on Brexit, it remains to be seen whether this trend will continue.

Looking ahead, the outlook for 2020 appears a positive one. Fundraising remains active and we have seen a rise in the number of specialist funds being raised such as ‘minority only’, ‘sustainably focused’ and ‘sector specific’. Coupled with already high levels of dry powder, this is a promising outlook for the mid-market as investors seek to deploy capital in 2020.

Consumer, Leisure and Retail:

  • Vitruvian has agreed to acquire Sykes Cottages, a UK-based holiday home provider, from Livingbridge. Vitruvian Partners were advised by DC Advisory, learn more about this deal here >

Healthcare:

  • NorthEdge Capital has sold Direct Healthcare, a UK-based developer and manufacturer of a range of innovative pressure care products, to ArchiMed, for an estimated minimum consideration of £70m
  • Synova Capital has acquired Preventx, a UK-based supplier of online sexual health testing and diagnostic services, for an undisclosed consideration

Industrial Products & Services:

  • Sun Capital Partners has agreed to acquire Allied Glass, a UK-based provider of glass packaging solutions, from CBPE Capital, for an undisclosed consideration
  • Inflexion has agreed to acquire Aspen Pumps, a UK designer, manufacturer and distributor of mini pumps that remove condensate water from air conditioning and refrigeration systems, from 3i, for a consideration of £400m
  • LDC has agreed to acquire ELE Advanced Technologies, a manufacturer of aerospace components, industrial gas turbine parts and components for the commercial diesel sector, for an undisclosed consideration

Services:

  • Exponent has agreed to acquire KPMG Pensions, KPMG’s UK-based pension advisory business, from KPMG, for a consideration of £200m
  • Blackstone has agreed to acquire HH Global, a UK-based global provider of outsourced marketing execution services, for a consideration of £100m
  • Livingbridge has acquired Nationwide Hire, a UK-based provider of equipment rental and hire services, for an undisclosed consideration
  • Sovereign has agreed to acquire UK Car Park Management Limited, a UK-based premier parking control management company, for an undisclosed consideration

TMT:

  • Inflexion has agreed to acquire Ridgewall, a UK-based provider of managed IT and communication services, for an undisclosed consideration
  • Mayfair Equity Partners has agreed to acquire Parcel2Go, a UK-based delivery service price comparison website, for an undisclosed consideration
  • Endless has agreed to acquire Victoria Plum, a UK-based online retailer of bathroom products, from TPG Capital, for an undisclosed consideration