The number of merger and acquisition deals in the West of England plummeted in the first half of 2020, a new report has revealed.
The region recorded 179 deals with a total value of £5.46billion, according to the Experian Market IQ’s latest M&A Review.
The research, which analyses mergers, acquisitions and other deals worth more than £500,000, found there was a decline of nearly 40 per cent in volume compared to the same period in 2019, while value was down by 22.6 per cent year on year.
Although the region's deal-making activity at the start of 2020 was level with previous years, the disruption of the pandemic saw the level of activity in Q2 drop by more than 50 per cent in volume and 80 per cent in value, according to the report.
For the first time in seven years, Q2 saw deal volumes dip to below 100, at 59 announced transactions worth £860million.
The South West accounted for 5.1 per cent of all 海角视频 deal values and 7.1 per cent of deal volumes.
The region’s only mega deal, which was announced before the 海角视频 went into lockdown, contributed 78 per cent to the regions’ total deal values for H1 2020.
While acquisitions still dominated the deal landscape, the most valuable deal for the South West in the year to date saw Exeter-based Pennon Group announce the sale of its waste management subsidiary Viridor to US private equity firm Kohlberg Kravis Roberts.
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The deal, which was announced days before the 海角视频 was put into lockdown, is worth £4.2billion and is expected to close in the summer of 2020, following receipt of shareholder approval in May.
In the days leading up to and into the lockdown period, South West Plcs raised more than £800million through the capital markets, bolstering their cash reserves and strengthening balance sheets as the financial effects of the Covid-19 outbreak depressed the economy.
Bristol-based student accommodation provider Unite Group raised £300million in the largest capital markets deal of the year so far, with retailer WH Smith raising £286million and Warehouse REIT of Exeter, securing £153million.
Meanwhile, chartered accountants PKF Francis Clark topped the rankings of the region’s busiest financial advisers, after the firm’s corporate finance team helped to facilitate nine deals across sectors including energy, manufacturing, retail and IT.
These included Cornwall-based Kensa Group’s sale of a minority shareholding to Legal & General, paving the way for the ground source heat pump specialist to scale up and play a growing role in the 海角视频’s green energy revolution.
Andrew Killick, corporate finance partner at PKF Francis Clark, said: “The last few months have been a difficult time for many people and organisations, but, despite the uncertainty that Covid-19 has brought to the country, there has still been corporate finance activity, and we have seen an increase in appetite for transactions develop recently."
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Manufacturing remained the most active industry by deal volume, with 48 deals reported in the year to date - 33 per cent fewer than in the same period last year.
Infocomms and professional services were the next most active sectors, recording 43 and 40 deals respectively, followed closely by wholesale and retail on 37 deals.
Deal values across most sectors declined, with few exceptions including professional services, waste management, health and transport, which all saw an upturn in value year on year.
Mr Killick added: “While there are certainly obstacles ahead, I am hopeful that businesses in the South West will continue to adapt and thrive, and the support of banks, private equity and alternative finance providers is critical to ensure this happens.”