Yorkshire and the Humber private equity activity significantly dipped in 2022, new data shows

The data reveals that 16 transactions were completed in 2022, worth a cumulative £390 million. This fell from 24 deals in 2021, worth a total of £14.7 billion.

Exceptionally challenging market conditions and economic factors such as the war in Ukraine, soaring inflation and debt markets tightening, are said to have created difficult conditions for private equity activity.

Sebastien Leusch, investment director at Equistone Partners Europe, said: “The decrease in the value and number of equity deals across the North West is an indication of the challenging economic headwinds that we have been faced with in 2022.

"It’s important to note the inflated 2021 figures which actually, when we account for the two largest deals, indicate a growth in deal value.

"We are seeing a promising number of high-quality management teams and businesses coming not just from Yorkshire and the Humber, but also from the North as a whole.”

Researchers note that 2021’s figure was inflated due to two significant retail transactions in the region.

February of 2021 saw TDR Capital’s £6.8 billion carve-out of Leeds-headquartered supermarket chain ASDA.

Later the same year, in October, Bradford-founded Morrisons was also taken over by Clayton, Dubilier & Rice (CD&R) for a figure of £7.1billion.

The Morrisons takeover was notable for the return of Sir Terry Leahy to the UK grocery sector. Sir Terry, who was formerly CEO of Tesco, is a senior advisor at CD&R.

While the value and number of deals dropped, there were still success stories in the region.

One Equity’s £118 million acquisition of Trustmarque from Capita in April was among the largest deals in the UK across the year.

As a whole, the North saw 38 completions, close to London’s 46. However, the gap in the value of transactions was proportionally wider, with London’s £16 billion almost quadrupling the North’s £4.1 billion.

Across Europe, the UK market was still the busiest by volume and largest by value, with 189 buyouts totalling £35.2bn.

Mr Leusch added: “The UK has been and will continue to be a hub for private equity activity in Europe, and we hope to see more of this coming from the devolved nations and regions, but in the face of Covid, war in Europe and profound economic headwinds, the market is entering 2023 with a degree of trepidation.”

The data compiled by CMBOR summarises trends in buyouts across Europe for deals completed by December 12, 2022.

CMBOR defines buyouts as over 50 per cent of shares changing ownership with management or private equity, or both having a controlling stake upon deal completion.

To qualify, equity funding must primarily be from private equity funds and the bought-out company must have its own financing structure.