- Inbound investments into Midlands companies valued at £795.1m in 2021
- US and Swedish investors have completed 40% of investments in 2021
- Deloitte’s ‘Cross Border Deals Radar’ tracks inbound and outbound M&A activity between investors and corporates in the Midlands and overseas
Last year, international investors ploughed £795.1m worth of investment into Midlands companies in 2021 via 66 transactions, according to Deloitte’s Cross Border Deals Radar.
The majority of the investment was delivered in Q3 2021, standing at £630.4m, and it was the highest value quarter for inbound investment since Q3 2019 – (£1.5bn). The total is almost five times higher than collective inbound transactions for the rest of the year, valued at £164.7m.
Conducted with Experian Market iQ, Deloitte’s Cross Border Deals Radar tracks inbound and outbound transactions between investors and corporates in the Midlands and overseas.
The data revealed there were 66 inbound deals in the Midlands in 2021, with a third of these completed by US companies (22) and almost a fifth completed by Swedish investors (11). Collectively, bidders from these two territories were responsible for half of the total deals completed.
It makes the Midlands the most popular UK destination for Swedish investors, ahead of the South East (9), North West (6) and London (4). Notable deals completed by Swedish bidders include Stockholm-based EQT Partners’ £102m purchase of a 785,000 sq ft Primark distribution unit in Thrapston, Northamptonshire, and AR Packaging’s acquisition of independent folding carton manufacturer Firstan Ltd.
The most active sectors in the Midlands for cross border deals this year have been manufacturing (24), information & communication (15) and wholesale & retail trade (11) businesses. Major deals include Axalta Coating Systems’ purchase of automotive repair and refinish products U-POL for £428m, and online car retailer Cazoo’s purchase of Worcester-based SMH Fleet Solutions for approximately £70m.
Nick Carr, a director at Deloitte said: “Whilst US investment is prevalent across the UK and has been for some time, the region has seen a unique level of interest from Swedish investors. Manufacturing businesses with a physical foothold in the region have been the most popular target, demonstrating the resilience and skills that continue to be developed across the Midlands market.
“Figures for the year are considerably stronger than 2020, that ended on approximately £420m of inbound cross border investment. That said, it is still lagging behind pre-pandemic levels, with £2.2bn worth of deals in 2019. With Brexit associated factors impacting investment decisions, it will be interesting to see how the changing costs of freight will impact UK cross border investment activity.”