Acquisitions made by UK private equity-backed businesses hit record levels in Q1, says Rickitt Mitchell

The number of acquisitions made by private equity backed businesses in the UK hit record levels in the first quarter of 2021, with 168 transactions completed in just three months, according to Rickitt Mitchell’s Buy and Build Barometer. 

The latest analysis from the corporate finance firm, conducted in partnership with Experian Market iQ, reveals an 85 per cent rise in the figures seen in the corresponding quarter last year. Q1 2020 saw 91 deals completed, prior to the first Covid-19 lockdown, with the latest figures nearly triple the 57 deals in Q1 2019. 

On a local level, the majority of regions saw a significant boom in activity. The South West saw the highest number of transactions, with 18 deals completed in the first quarter. This was followed closely by London and the East of England (both 17), the South East (16), with the North West the first of the Northern regions with 11 bolt-on deals in this period.  

This was also the third successive quarter that transactions hit triple figures, with the GBP980 million value in Q1 2021 also the highest levels for a quarter since the end of 2018. This figure was aided by the completion of the GBP498 million acquisition of Dotmatics Ltd, the Bishops Stortford-based provider of informatics software and services, by San Diego headquartered Insightful Science. 

The UK saw significant interest in overseas acquisitions, with 67 cross border transactions completed during the first three months of 2021, representing 40 per cent of all deals. The USA was most attractive, with 23 deals finalised, followed by EU markets in France (13), Netherlands (7), Sweden (6), Norway (5) and Switzerland (3). 

Bristol-based veterinary practice Independent Vetcare Limited, backed by EQT, was the most active business in Q1, completing 36 bolt-on acquisitions in three months. This includes expansion into the Netherlands, Belgium, Ireland Norway, Switzerland and France as the firm targets growth in both the UK and EU markets. Behind this, security equipment specialists Fortus Group, backed by Rockpool Investments, completed 10 transactions, with Halifax-based Wren Sterling, backed by Palatine Private Equity, closing four deals. 

Neil Mitchell, Partner at Rickitt Mitchell, says: “The start of 2021 has seen record levels of buy and build activity by private equity-backed businesses, who have learned from previous economic downturns that there is a real opportunity to generate value as the economy recovers. The deal making environment is also aided by acquirers having access to more liquidity, as well as sellers setting more sensible valuations. 

“It will be interesting to see how appetite evolves over the coming months, especially as we progress through the government’s roadmap out of lockdown. We still expect to see significant interest in bolt-on transactions, as private equity looks to focus on driving returns and taking advantage of the current optionality and liquidity within the UK debt markets.” 

Founded in 1976, Rickitt Mitchell is an independent corporate finance firm based in Manchester. Over the last 45 years, the firm has advised on more than GBP4 billion worth of transactions across all deal types, ranging from GBP10 million to over GBP100 million in value.