2021 was a bumper year for merger and acquisition activity in the UK. Professional services firm BDO enjoyed heightened demand for deals advisory services as a result, supporting transactions worth a combined £46 billion.
Across all deal types, 2021 was a year of rapid acceleration, with worldwide deal value jumping from $3.7 trillion in 2020 to $5.3 trillion in 2021. This was buoyed by financial investors continuing their growing share of the landscape, closing around $1 trillion in deals. This segment includes transactions by private equity firms (which focus on mid- and large-sized deals in established companies) and venture capitalists (which focus on investments in start-ups and scale-ups).
The UK deals market was no exception to this trend – as exemplified by the demand for transaction advisory services among private equity houses in 2021. Throughout the year, accounting and consulting firm BDO advised on more than 400 corporate finance deals with a value of £46 billion. Among these deals, transactions involving private equity accounted for 68% of the projects completed, as British markets continued to rebound following the disruption of 2020.
Peter Hemington, Head of M&A at BDO said, “2021 has been a remarkable year for dealmakers and activity has been underpinned by the resilience and ambition of the UK’s entrepreneurial businesses. Our private equity experience meant we were well placed as activity in the UK market in 2021 reached levels not seen since before the global financial crisis. We’ve seen exceptional deal values and volumes across sectors including technology and media, which continues to be one of the fastest growing areas of M&A activity for the firm.”
Among the largest deals BDO was involved with, the firm acted as reporting accountant for Greencoat UK Wind, supporting its £450 million fundraise in December – as it became the first renewable infrastructure fund to list on the LSE main market. The BDO team also supported BAE Systems with financial due diligence in its bid to join the global space race through its acquisition of In-Space Missions, a UK company that designs, builds, and operates satellites and satellite systems. Meanwhile, the firm advised the shareholders of pet accessories brand, Omlet on its sale of a minority stake for £33 million to Piper Private Equity.
Deals spanned a wide range of sectors with 27% focusing on technology and media in terms of volume and value. At the same time, 57% of BDO’s 2021 deals were cross-border – suggesting firms were looking to adapt to pandemic pressures by investing in digitalisation, and by expanding their reach. Even with some uncertainty at the start of the year, these trends will continue in the near-future, suggesting the current high levels of deal-making will continue throughout 2022 – something BDO is preparing for by growing its deals wing.
Chris Grove, head of Transaction Services confirmed, “We’ve continued to grow and develop our corporate finance team, counting nearly 100 new hires in 2021, so we’re able to support our clients’ ambitions with the best advice and expertise. Our M&A practice named four new partners and our Transaction Services team made 40 new appointments with three new partners… We’ve continued to see a very active deals environment into 2022 with strong drivers for all types of M&A, and we have a strong pipeline of activity across our business.”