Q1 2021 sees record levels of private equity-backed acquisitions

According to the new Buy and Build Barometer from Rickitt Mitchell, produced in partnership with Experian Market iQ, acquisitions made by UK businesses backed by private equity firms hit a record level in the first quarter of this year.

The analysis found that there were 168 transactions made by private equity-backed businesses in the first three months of 2021, an 85 per cent increase on the 91 private equity-backed deals in Q1 2020 and close to triple the 57 in the first quarter of 2019.

The figures suggest that private equity is increasingly looking to deploy capital as the UK begins to exit lockdown, with optimism increasing about an economic recovery as a result of the UK’s thus far successful vaccination programme and the roadmap out of lockdown.

The increase in deals was apparent across many regions, with the South West of England recording a high of 18 deals in Q1 2021. London and the East of England followed with 17 each, while the South East saw 16 deals.

Continuing the trend of widespread consolidation in the veterinary industry, Independent Vetcare Limited was the most active acquirer in the quarter. The veterinary group, which is backed by private equity firm EQT completed 36 deals in Q1, including acquisitions in France, Belgium and the Netherlands.

Independent Vetcare Ltd is targeting rapid growth across both the UK and EU and the scale of its acquisitive activity this year was illustrated by the fact that the next most prolific private equity-backed dealmaker, security equipment firm Fortus Group, completed 10 acquisitions.

Rickitt Mitchell Partner Neil Mitchell commented: “The start of 2021 has seen record levels of buy and build activity by private equity-backed businesses, who have learned from previous economic downturns that there is a real opportunity to generate value as the economy recovers. The deal making environment is also aided by acquirers having access to more liquidity, as well as sellers setting more sensible valuations.”

“It will be interesting to see how appetite evolves over the coming months, especially as we progress through the government’s roadmap out of lockdown. We still expect to see significant interest in bolt-on transactions, as private equity looks to focus on driving returns and taking advantage of the current optionality and liquidity within the UK debt markets.”


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