Increase in deal activity for UK logistics sector despite slow start to the year

Despite a slow start to the year, latest report from accountancy and business advisory firm BDO paints a promising picture for the UK logistics sector. Tony McDonough reports.

BDO’s Jason Whitworth anticipates an increase in transactions over the coming year


Deal activity in the UK logistics and supply chain management sector increased in the first half of 2023, despite a lack of ‘big ticket’ deals in the market.

Transaction volumes rose by more than 10% compared to the second half of 2022, with 32 deals completed from January to the end of June 2023, compared to 29.

Despite the increase in activity, the disclosed deal value fell significantly, as smaller deals dominated the market.

Deals included the acquisition of two Liverpool city region firms – Runcorn-based Maltacourt Global Logistics by Netherlands headquartered Janssen Group, backed by Waterland Private Equity; and Shift Group’s acquisition of the brand, IP and selected assets of St Helens-based Tuffnells.

BDO, which has offices in Liverpool and Manchester, announced 39 promotions across its North West operation in May.

It says it is now one of the biggest employers in Liverpool city centre after seeing headcount increase by 75% over the past three years. The firm now employs more than 700 people across its offices on Temple Street and No1Tithebarn.

The report ‘UK & Ireland M&A Update – Q2 2023’ also revealed that 35% of deals were cross-border transactions. Seven deals attracted private equity investment, with four securing direct investment and three acquisitions being completed by PE-backed companies.

Jason Whitworth, M&A partner at BDO LLP, said: “Following a slow start to the year, deal volumes rebounded in Q2, indicating a continued appetite for consolidation and investment in technology.

“The low disclosed deal value reflects a raft of smaller, lower value deal completions, compared to ‘big ticket’ transactions, highlighting a continued nervousness in the market to commit to larger investments given uncertainty in valuing future earnings.”

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A poll of industry leaders carried out at a series of sector events hosted by BDO and Barclays Corporate Banking earlier this year, found that 82% of respondents said changing levels of demand or volume was the biggest challenge currently facing their business.

In response, more than half of respondents (59%) said that they were focussing investment on technology to drive efficiencies, with wider use of AI and big data in supply chain processes, and the introduction of more automation, including warehouse automation, autonomous vehicles, 3D printing, and the increasing use of drones.

Jason Whitworth added: “Tech enablement and ESG certainly dominated equity investment interest this quarter, with venture capital backing four logistics tech businesses encompassing zero-emission delivery services, supply chain decarbonisation, data analytics solutions and workflow productivity.

“As markets settle, and with more sustained stability, we anticipate growing confidence in pricing which will unlock more transactions over the coming year.”

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