Midlands mid-market private equity deals fall by 24% in H1

KPMG has revealed that only 28 mid-market private equity deals were completed in the Midlands in H1 2023, reflecting a drop in volume of 24.3%, according to its Mid-Market Private Equity study.

It attributed the drop to market volatility and tough trading conditions.

The downward trend was matched across the country with a total of 327 deals worth £32bn completed in H1 2023, a drop in volume of 12%.

Meanwhile, for the overall private equity market 689 deals worth £70bn were completed in the first half of the year, compared to 909 deals completed in H1 2022.

KPMG stated that from a sector perspective, Business Services and Technology, Media and Telecommunications (TMT) took the top spots once again, accounting for almost two thirds (63%) of all mid-market private equity deals in H1 2023.

Business Services accounted for 46%, up from 40% in H1 2022, while TMT deals represented 17%, down from an average of 21% over the last five years.

Additionally, bolt-ons accounted for the majority of investments in the private equity mid-market, continuing the trend of the past few years.

There were 219 bolt-on transactions in H1 2023, representing a 47% increase in volume on H1 2019.

Overall, bolt-ons accounted for 67% of all deals in H1 2023, up from 63.7% over the same period in 2022 and 57.8% in H1 2019.

Khush Purewal, corporate finance partner at KPMG UK, said: “Despite hopes of a continued upward trend and a return to greater stability in the market, factors including rising inflation and interest rates, and geopolitical uncertainty, have combined to have a significant impact on deals during the first half of 2023.

“For the remainder of the year, it can only be hoped that the market sees some easing allowing confidence to return and deal volumes to begin to rise.”