South East Most Active Region For High-Growth M&A Outside London

• 139 M&A transactions involving high-growth businesses took place in the South East in 2023
• 11% of high-growth activity was completed in the ‘analytics, insight and tools’ sector, making it the most active
• Food and drink processors saw higher proportion of activity than elsewhere in UK
• The firm expects more M&A activity in the South East in 2024

At a time when M&A activity was low in the UK, the South East has been revealed as the most active region for high growth companies,* according to a report published today by the leading law firm, Cripps.

Cripps’ South East M&A Barometer: High growth business trends report analysed M&A activity and trends that affected high growth businesses** in the South East of England.

High-growth companies in the South East, were involved in a total of 139 M&A transactions in 2023. This positions the South East in second place, following London, for volume of deal completion.

Technology remained the most favourable sector with investors. Companies operating in the analytics, insights, and tools sector – which covers industries ranging from drug discovery to AI platforms – represented 11% of M&A activity in the South East in 2023. Some of the notable high-growth activity in 2023 from this sector includes Idox’s acquisition of eMapSite, Envisions’s acquisition of OKRA, and Regnology’s acquisition of Metadata Technology.

Food and drink processers saw a higher proportion of activity in the South East than elsewhere in the UK. This is partly due to Kent being home to the highest proportion of food and drink startups and scaleups in the South East.

The vast majority of M&A acquisitions of high-growth businesses were completed by corporate acquirers, with trade sales accounting for 93.5% of M&A transactions in the South East and professional investors (typically private equity funds) contributing to the remaining 6.47%. While the majority of acquisitions were completed by UK companies, the US participated in the second highest number of acquisitions of South East businesses, acquiring nine companies in the region.

The research published today is the first in a series of M&A reports from Cripps, aiming to provide insight into the challenges and opportunities facing high-growth companies across the UK. Looking to 2024, there have already been three acquisitions of SE-based high growth companies this year.

Salim Somjee, corporate partner at Cripps, comments: “As a longstanding champion of ambitious, high-growth businesses in our region – as well as the UK and abroad – we are pleased to see that the South East is fertile ground for corporate transactions – even in the challenging conditions of 2023. We expect to see further M&A activity this year as some companies scale up, while others contend with macroeconomic headwinds.

“The priority for entrepreneurial businesses continues to be cashflow and the management of day-today operations, but management teams will also be thinking about longer term expansion and possible exit strategies. Understanding market conditions will be critical to inform their decision-making and manage transaction risk.”

To access the full report, please visit: South East M&A Barometer: High-growth business trends

*  Excluding London

**Methodology:

This report was created alongside Beauhurst, a searchable database of the UK’s high-growth companies, and focuses on the exit activity of high growth companies in the South East in 2023. Beauhurst identifies ambitious businesses using eight triggers that they believe suggest a company has high-growth potential. These include: equity investment; debt investment; accelerator programmes; scaleup status; MBOs/MBIs; innovation grants; 3rd party high growth lists. More details on Beauhurst’s tracking triggers are available at https://www.beauhurst.com/blog/uk-companies-most-potential/.