Food and beverage (F&B) sector M&A activity saw an uptick in both the volume and value of deals during the second third (T2) of the year with the number of deals increasing by 68.2% over the same period last year, and deal value going up 49.1% to £400m.
That’s according to the latest UK Food and Beverage Sector M&A report from corporate finance house, Oghma Partners, which also shows that over 75% of deals had an estimated value of £10m or less as there was a significant absence of middle to higher market deals during the period, similar to T1 2023 (80% of deals had an estimated value of £10m or less).
Only 8.1% of transactions meanwhile, were estimated to be above the £50m mark, falling well below the five-year historic average of 13.9%.
Overseas buyers were responsible for many of the deals during the period, accounting for 24.2% of deal volume, which is in line with 2022 at 25%. The number of deals with a financial buyer increased compared to T2 2022, with 27.3% of buyers a financial buyer compared to 9.1% in T2 2022.
Equivalent to T1, the beverages sector was the most active with several niche producers changing hands. There were multiple deals in the beer market; with Breal Capital acquiring two microbreweries in Brew by Numbers and Black Sheep Brewer.
The chilled food space has been particularly active over the period, comprising of 21.6% of transactions compared with only 2% to the same period in the prior year and 6.1% in T1. Notably, chilled ready meals manufacturer Oscar Mayer was acquired by Pemberton Asset Management and fresh ingredients supplier Freshcut Foods was acquired by Flywheel Partners.
Mark Lynch, Partner at Oghma Partners, said: “The resilient and defensive characteristics of the food and beverage M&A sector can once again be seen with T2 deal volume at its highest level since 2019 despite the relentless market challenges. Whilst there has been a recovery in deal value, this has been from a very low base and the overall quantum value of transactions remains low.
“Our outlook for the remainder of the year continues to be positive, at least from a deal volume standpoint. The recovery we have seen in activity is likely to be aided by easing food inflation both output and input.”
