Overseas investment into Midlands companies hits 22-year high - Deloitte
Added by Love Business East Midlands | 13 December 2022
Between July 2022 and September 2022, the number of inbound cross-border deals for Midlands-based companies reached its highest level in 22 years, with 29 deals completed in Q3, according to the latest analysis from Deloitte’s Cross Border Deals Radar.
- Q3 2022, there were 29 inbound cross-border deals for Midlands-based companies – the highest quarterly level in 22 years.
- The East Midlands in particular saw inbound deal volumes increase significantly to 17 – the highest quarterly level this century.
- Outbound deal volumes in the Midlands also increased from 11 in Q2 2022 to 14.
The research, conducted quarterly in collaboration with Experian Market IQ, tracks inbound and outbound M&A activity between investors and corporates in the Midlands and overseas. The latest results reveal that inbound dealmaking across the Midlands was at its highest volume since Q2 2000.
Of the 29 deals completed, almost half (13) were in various areas of the manufacturing sector with investors securing complementary brands, additional capabilities and products, or acquiring competitors.
Technology-related business investments remained strong, accounting for a further five transactions. Swedish investors were the most active investors accounting for nine of the transactions, with US investors delivering a further six deals.
The East Midlands in particular saw a substantial rise in inbound deal activity, making up 17 of the deals in Q3 2022, a three-fold increase from five in Q2 2022, marking the most active quarter for the region this century.
In the West Midlands, despite a fall from the record high of 17 in Q2, deal activity still remained strong in Q3, with 12 deals completed for businesses in the region. The only region that completed more inbound deals over this time period was London (34), with South-East England falling to third place with 28 deals completed.
The strong performance of the Midlands represents a 26 per cent increase on the previous quarter, and a 93 per cent increase year-on-year. The increase comes against the backdrop of a deteriorating economic climate and a reduction in national inbound deal volumes overall with falls of 16 per cent and 25 per cent respectively over the same period.
Outbound investment also remained strong in the Midlands in Q3 2022, with the volume of deals completed by bidders in the Midlands for overseas companies increasing from 11 in Q2 2022, to 14 in Q3 2022. This again bucked the trend of decreasing outbound deal activity across the UK, as overall outbound cross-border activity decreased by 30% when compared to Q2 2022 (148) and 28% year-on-year (146).
Notable Midlands deals in Q3 2022 include the acquisition of Nottingham-based mobile scanning solutions provider GeoSLAM by US-based FARO Technologies, and the acquisition of Uni-Pol, a component manufacturer with facilities in China, India and Mexico, by Doncasters Group, headquartered in Burton-on-Trent.
Darren Boocock, a partner at Deloitte, said: “Despite the UK widely being considered to be in a recession, it is encouraging to see the Midlands report such strong deal activity for yet another quarter, particularly with the highest levels of inbound investment in 22 years.
“The sector mix of the deals highlights both the traditional manufacturing background of the Midlands alongside the region’s growing technology base of businesses.
“As we head into the next quarter, it is unlikely that such strong levels of both inbound and outbound deals will continue. The current global economic climate and tightening of debt markets is likely to weigh on investors’ decisions. The breadth of the Midlands business base alongside the continued relative weakness of the pound against both the dollar and Euro, may help to mitigate some of the headwinds, however we are likely to see lower levels of cross border deals as we head into 2023.”
Please note: some figures differ to the previous quarter (Q2 2022) as deals are added retrospectively and continuously. All figures are verified to-date (12/12/2022).
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