M&A Logistics has said levels in the UK logistics and supply chain management sector have been restored to 2021 levels.
This is due to renewed interest from international buyers and venture capital investors targeting early stage tech-enabled companies.
Deals are said to mirror those seen in Q4 2021, 21 deals were completed between July and September. This has been described as a ‘reawakening’ as investments towards UK assets from international buyers grow.
Deals have been completed with key industry players such as Super Group Limited, DSV A/S, and InPost SA. Almost 20% of transactions were venture capital investors targeting early stage tech-enabled companies servicing the sector.
A report by BDO LLP showed that disclosed deal values increased during the third quarter of the year to £288 million, spiking a significant rise from £232 million compared to the previous quarter.
The £161 million acquisition of Xpediator aided the increase, however total disclosed deal value is still lower than the last three years.
A word of caution was also sounded by the UK M&A Update Q3 2023 for Logistics and Supply Chain Management. Warning increased evidence of distress within the market following the acquisition of the trade and assets of Nelson Distribution by Kinaxia Logistics, the administrations of Selazar Ltd, Glasgow Car Movers Ltd and Mark Stewart Limited.
Jason Whitworth, M&A partner at BDO LLP, said: “Maybe surprisingly given the continued challenges in the economic environment, Q3 saw an increase in deal activity to a new two-year high.
This was driven by a number of factors, including venture capital investors investing in tech, renewed activity from international buyers, which have more recently focussed on other ‘more attractive’ international growth markets, as well as increased evidence of distress.
“The latest edition of our UK Logistics Confidence Index showed that 40% of respondents were likely to make acquisitions over the next 12 months.
“Although lower than last year, it does confirm the industry’s continued appetite for consolidation. Interestingly, in the current market where margins are under pressure, it wasn’t scale, synergies or cost savings that were the leading reasons for wanting to transact, but expansion of service offering and entering new sectors.”