North mergers, acquisitions, deals top £42bn

The value of mergers, acquisitions and share deals involving companies in the North of England soared to more than £42 billion in 2021, according to the latest Experian United Kingdom and Republic of Ireland M&A Review.

The North West returned its second highest level of M&A deal volumes in the last decade with 883 transactions worth £22 billion.

Yorkshire and Humber saw an exponential rise of 51% in the value of its deals to just over £17.4 billion, and North East deal activity was up 13% to 367 transactions — the busiest year on Experian record — taking the value of North East M&A to £2.8 billion, almost £1.8 billion above the previous year’s total.

Yorkshire and Humber’s biggest deals included the £7 billion cash purchase of Bradford-based supermarket giant Morrisons by US private equity group Clayton, Dubilier & Rice (CD&R), CBRE’s agreement to acquire a 60% ownership interest in Leeds-based infrastructure consultancy Turner & Townsend for £960 million in cash, and the £919 million takeover of Sheffield-based video gaming firm Sumo Group plc by a subsidiary of China’s Tencent.

The North West’s biggest deals included Edinburgh-based investment giant Abrdn’s acquisition of Manchester-based platform Interactive Investor for £1.49 billion and the deal by California-based video game giant Electronic Arts (EA) to buy Chesire-based mobile games studio Playdemic from AT&T’s Warner Bros. Games for $1.4 billion in cash.

The North East’s most prominent deals included Flutter Entertainment plc — the Dublin-based owner of Paddy Power, Betfair and Fanduel — acquiring Sunderland-based Tombola for an enterprise value of £402 million in cash, and the roughly £300 million acquisition of  Newcastle United Football Club by an investment group led by Saudi Arabia’s Public Investment Fund (PIF).

The Experian report said: “Manufacturing remained the most active sector in the Yorkshire and Humber region with 176 transactions in 2021, ahead of professional services (168) and wholesale and retail slightly further back on 148 deals.

“These sectors (wholesale and retail aside), along with infocomms, support services, financial services, construction, transport, hospitality and public administration and defence and compulsory social security all reported double-digit growth in deal volume.

“The education sector exceeded those numbers year on year, with triple-digit growth of 110% (from ten deals in 2020 to 21 in 2021).

“In respect of transaction values, wholesale and retail (where deals worth almost £10.7bn were recorded), was the highest by industry sector.

“The next best was manufacturing, where the total value of deals reached nearly £2.4bn – this figure was boosted by Cargill, a US global food corporation, agreement to acquire the Performance Technologies and Industrial Chemicals (PTIC) businesses of Goole-based Croda International, in a deal worth €915m (approximately £778m).

“It is also important to highlight the professional services, infocomms, support services and real estate sectors, which all managed to break through the £1bn barrier for transaction value …

“There was a total of four deals recorded during Q4 that made it to our top ten list for the North West, contributing to the surge in overall deal values during the closing months of the year.

“The largest of these was the investor buy-out led by CVC Capital Partners of ekaterra, the global tea division of consumer goods Unilever, which retains its registered office on Merseyside, in a deal valued at £3.8bn.

“December also saw the acquisition of Interactive Investor, a Manchester-based online investment platform by abrdn (formerly Standard Life Aberdeen) for a total consideration of £1.5bn.

“Rounding off the top three mega deals for the North West was the offer to acquire Blue Prism Group, a Warrington software developer by Bolt Bidco, a subsidiary of US financial software company SS&C Technologies.

“This followed a heated takeover battle for the firm in competition with an investor buy-out vehicle led by the Vista Funds; the SS&C Technologies offer was £24m higher than Vista’s original bid from September …

“The North East M&A market was among the UK’s quickest to recover from the effects of Covid-19, with quarterly transaction volume returning to pre-pandemic levels in the final quarter of 2020 …

“During 2021 the volume of acquisitions increased by 29% compared to 2020 and this is clearly evident in the top 10 deals, 40% of which are acquisitions.

“The largest of these deals was in the online gambling sector, where Dublin-based Flutter Entertainment acquired Sunderland’s for a cash consideration of £402m.

“Another large acquisition announced during the last quarter of the year was the £225m purchase of Brightpearl in Bristol, a developer of a cloud-based multi-channel retail management system, by Newcastle accountancy software firm Sage Group.

“While IPO’s in the region were notable by their absence in 2020, 2021 saw two such deals recorded in the North East as confidence in the public markets returned.

“The IPO of Kitwave, a confectionary and snack food wholesaler based in North Shields, raised £64m for the company and £18m for existing shareholders, while Bregal Fund, a major shareholder in Stelrad Group, manufacturer of central heating radiators, received part of the £95m raised in its IPO, which completed in November 2021.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.