Deal Activity in the Southwest 2023
Although the Southwest experienced a 20% increase in deal volume between Q1 and Q2, activity in Q3 decreased to a level not seen in over a decade. A total of 88 transactions were reported between June and September, with the total volume of deals currently at 340.
Meanwhile, 572 deals were reported during the same period in 2022, meaning the overall year-on-year position is at a 41% decline. Deal values also fell by just below 40% to £2.4 billion for the year to date. In the same period last year, values were just below £4 billion.
All value segments underperformed, falling short of the record-breaking figures of 2021 (in Q1 of 2021 deal values in the Southwest were an incredible £21 billion), while volumes recorded a high of 241.
Larger, complicated deals that are likely to come under more scrutiny from regulators and that attract more cautious lenders continue to be the value ranges experiencing the most challenges. Meanwhile, smaller deals were more resilient to market conditions.
Acquisitions dominated deal activity, making up 66% of the region's deals, albeit at a more subdued level than the region has experienced over the last few years.
The most active sector for deal activity in the Southwest was professional services, overtaking manufacturing. A total of 95 deals worth £535 million were completed in the professional services sector in 2023, down from 228 deals in the previous year. Although fewer deals were completed in this sector in 2023, the value of these deals did increase, rising from £2.7 million in 2022 to £5.6 million this year.
The volume of manufacturing deals this year remained steady, only dropping from 100 recorded deals in 2022 to 92 deals this year. However, the value in this sector experienced a more dramatic change, falling from £1.3 billion to just £218 million; an 80% decrease.
The technology sector was the Southwest's second most valuable sector, experiencing a surge of 23% in deal values. Education, transport, and utilities experienced a boost in deal activity too, while construction, hospitality and real estate delivered higher valuations than seen in the previous reporting period.
Growth by acquisition is set to remain an important strategy for businesses, so the final quarter of 2023 could see one last increase in deal volume before the year ends. Market conditions stabilising, and adaptability and resilience demonstrated by the market recently bodes well for a return to growth in Q4 and the beginning of 2024.
Advising on 23 deals this year, GS Verde Group has once again topped Wales's legal and financial adviser activity tables in Experian's Market IQ report, the only firm to appear in both. This impressive statistic illustrates the appetite for - and the efficacy of - the Group's unique multidiscipline approach to corporate transactions and dealmaking, as well as solidifies the Group as a significant player in the UK's M&A landscape.
GS Verde Group's multidiscipline team of deal-making experts with wide-ranging sector experience, play a significant role in the success of the Group and ensure that we can provide the most optimal outcomes for businesses.
Experian Market IQ Report 2023
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