Highlights

Ever since the UK’s EU referendum three years ago, political uncertainty and economic concerns have been sweeping across the UK and increasingly spilling over to mainland Europe.

The ongoing turmoil in Westminster has been putting a severe strain on the relationship between the UK and the EU, with the imminent threat of a no-deal hard Brexit lurking. As a result, overall M&A activity levels have spiralled downwards for months, with both inbound and outbound M&A activity hitting all-time lows.

UK-headquartered companies seem to shy away from investing significant amount of capital outside of their home market and exposing themselves to foreign exchange risk on top of the political uncertainty. While facing the same currency risk, UK-based private equity investors appear very keen to pursue opportunities in the EU, as a means to geographically diversify their fund exposure. In turn, they have shown rather diminished appetite for UK-based targets, leading to the delay of a large number of transactions. However, UK private equity investors that are unable to explore EU opportunities are having to evaluate alternative domestic investments in the lead-up to Brexit. As a result of these delays and given the high amount of dry powder, funds are increasingly under pressure to invest.

In our view, this is the key reason why the UK’s mid-market M&A has been fairly resilient over the past few quarters, despite the current market uncertainty.

Some of the key transactions that took place during the period include:

Consumer, Leisure & Retail

  • Bregal Freshstream acquired a majority stake in Away Resorts, the operator of 6 holiday resorts and caravan parks across England and Wales, from LDC, for an estimated consideration of £100m. DC Advisory advised LDC on the sale of Away Resorts to Bregal Freshstream, discover more >
  • Hillhouse Capital Management acquired Loch Lomond Distillers, the producer of Highland Single Malt Scotch whisky, from Exponent, for an estimated consideration of £400m

Healthcare

  • G Square Healthcare Private Equity acquired Dental Care Group, the operator of a dentistry chain with 20 NHS and private practices in Essex, Norfolk, Suffolk, Cambridge and Northampton, for an undisclosed consideration

Industrial Products & Services

  • RJD Partners acquired Land Survey Solutions, the provider of land and measured building surveys, for an undisclosed consideration

Services

  • ECI acquired Send For Help, the lone worker protection provider, for an undisclosed consideration
  • Equistone acquired CH & Co Catering, the provider of catering services, from MML Capital, for an undisclosed consideration
  • Goldman Sachs Merchant Banking acquired Aston Lark, the provider of insurance brokerage services, from Bowmark Capital, for a minimum consideration of £320m
  • Warburg Pincus and TA Associates acquired a majority stake in Inspired Learning, the leading group of private premium schools in Europe, Africa, Latin America and Asia Pacific, from Oakley Capital and other stakeholders, for an undisclosed consideration

TMT

  • The management team acquired AgriBriefing, the media company that provides real time news and information resource, in a MBO from Horizon Capital, for an estimated consideration of £150m