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Deal volumes in the UK logistics and supply chain management sector hit a record high in 2024 in a strong year of dealmaking, with 93 deals completed in the logistics sector, up 15% YOY, according to BDO.
Transaction volumes in Q4 2024 fell to 19 deals, compared with a quarterly five-year high of 27 seen in the previous quarter. However, it said there remains a “strong appetite” for deals, particularly from international investors.
Total disclosed deal value for Q4 2024 was also “considerably lower” than the previous quarter. This is largely attributable to a high value in Q3 driven by the acquisition of Evri by Apollo Global Management Inc for £2.7bn.
According to the latest report from accountancy and business advisory firm BDO LLP, the ‘UK M&A Update – Q4 2024, Logistics and Supply Chain Management’, in the final quarter of the year, the majority of transactions in Q4 were trade deals and 58% were cross-border – an increase from 44% in Q3.
Notable transactions included Green Fulfilment’s acquisition of Omni Channel Fulfilment; InPost SA’s acquisition of the remaining 70% shareholding in Menzies Distribution group; and Schenk’s acquisition of Suttons Tankers. Private equity appetite in the sector continued and there were several direct investments, whilst several of the trade acquisitions were by PE-backed businesses.
The report also showed that technology remains a key driver in the sector, with 42% of deals tech-related.
Jason Whitworth, M&A partner at BDO LLP, said: “The drop in deal activity in Q4 undoubtedly reflects a forward pull on deals to complete ahead of the Autumn Budget. The market was also digesting the budget announcements, notably the impact of the increased costs that will be incurred by businesses in the form of higher National Insurance Contributions and minimum wages. That being said, there remains a strong appetite for deals, particularly from international investors accessing and consolidating in the UK.”
Following the inauguration of President Donald Trump, BDO said UK businesses are being urged to prepare for potential supply chain disruptions and rising trade costs, as uncertainty looms over future US trade policies.
A recent BDO survey of 500 mid-market businesses revealed that supply chain disruptions are amongst the top challenges UK businesses face and it is expected that mitigating supply chain risks will become a “key priority” in the coming 12 months.
Whitworth added: “With this continued uncertainty and challenge comes opportunity for those building on effective and quality service, and we anticipate that capital rich investors and trade will continue to drive increased investment activity as the focus shifts to increased technology enablement and consolidation of supply chain services to drive efficiencies.”
