The value of private equity backed deals in the East Midlands was at record levels in 2022, according to full-year data from CMBOR, the Centre for Private Equity and MBO Research based at Nottingham University Business School and supported by Equistone Partners Europe.
There were 21 deals in the East Midlands in the year with a combined value of £1.9bn – up from the total value of £1.5bn in 2021 and higher than the previous peak in 2015 (which stood at £1.6bn).
Whilst the number of deals in the East Midlands also increased from 13 in 2021, the average deal size reduced from £114m (2021) to £90m (2022), still considerably higher than the 10-year average of £60m. 14 of the deals occurred in the first half of the year, with 7 in the second half, suggesting that momentum could be reducing.
Will Copeland, from Equistone’s Midlands office, said: “Both in the East Midlands and nationally, 2022 continued the trend of 2021 with significant amounts of private equity capital invested. It is a reflection of the current quality of management teams and businesses in the East Midlands region that there has been a huge amount of investment from private equity in the region at more than double the 10-year average of private equity capital invested.
“For the year ahead, despite the continued economic uncertainty, there continues to be several interesting opportunities emerging in the Midlands.”
CMBOR’s year-end report also showed that private equity activity across the whole of the UK was well above the 10-year average and was surpassed only by 2021 since the global financial crisis. At £35bn, the cumulative value of the 189 buyouts of UK-based companies in 2022 represented the third highest headline figure in the 35-year history of CMBOR, surpassed on an inflation-adjusted basis only by the £44bn recorded in 2007 and £47bn in 2021.
Across the UK, there was an expected drop in exit activity compared to record levels in 2021, as private equity firms realised 109 investments in the UK at an aggregate value of £23bn, compared to 150 transactions at an aggregate value of £29bn in 2021. The dominant exit route for private equity in 2022 was to trade buyers, accounting for 57% of exits by value, followed by exits to other private equity investors (42%).
Despite the well-publicised rout in tech valuations, TMT continued to attract sizeable investment and was highest in terms of volume (24%) and value (29%) among all sectors for the very first time. This was followed by the Leisure sector (14% of total value) and Healthcare sector (14% of total value).
“Notwithstanding the turbulent economic conditions, a number of sectors have witnessed strong buyout activity,” said professor Kevin Amess, director of CMBOR at Nottingham University Business School. “TMT continues to receive significant investment, a trend demonstrative of how deeply private equity has committed to covering and investing in the sector.”
