Mid-market private equity investment activity in the Midlands rose slightly in the first half of 2024, despite persisting challenging macroeconomic conditions, according to KPMG UK’s latest Mid-Market Private Equity analysis.
The firm’s most recent M&A study revealed that 33 mid-market transactions were completed during the first six months of the year, representing a rise of 17% when compared to 28 transactions completed during the same period in 2023. However, investment values dipped by 21% to £1.9 billion when compared to £2.3 billion invested during the first half of 2023.
Nationally, mid-market private equity investment activity in the UK declined by 11%, with 321 mid-market transactions completed in the first half of 2024, compared with 360 transactions in the same period in 2023.
Against pre-pandemic M&A activity (H1 2019), 2024’s figure reflects an increase in activity of 17%, suggesting the market has begun to normalise.
UK companies continued to remain attractive to international buyers, with inbound deals accounting for 42% of all M&A activity during the first half of 2024 – and almost half of those buyers were US-based.
Commenting on the findings, Khush Purewal, Partner and Head of Deals at KPMG in the Midlands, said: “Despite a slower start to the year, we’re optimistic that with greater economic and political stability, there are strong fundamentals for the M&A market to return to healthier levels of activity. Both private equity firms and lenders are back in the market looking to complete transactions, albeit the quality threshold for doing deals remains high.
“Our own pipeline, both going into and crucially coming out of the summer is strong, and we’re seeing a greater appetite for transactions, with a notable resurgence of deals across all sectors.
“Looking ahead to the remainder of 2024, after a prolonged period of uncertainty, international investors will now be looking at the UK as a more stable environment for investing into new businesses and realising portfolio assets. Closer to home, many of our domestic private equity firms are still sat on significant amounts of dry powder.
“In short, when the annual post-summer deals starting pistol is fired in September, we expect fast-paced action all the way to the year end: The foundations needed for dealmaking have significantly improved over the last few months, so enjoy the summer and gear-up for deals across the autumn season.”
