Review of 2024 and look ahead to 2025 for North East and Scotland

As featured in Insider. 

How would you summarise 2024 in the North East and Scotland region, specifically with regard to M&A and the opportunities for private equity?

“M&A activity really picked up in the North East after a slow start to 2024 and businesses in the region have continued to demonstrate resilience in the face of macroeconomic challenges. We expect this to continue to drive activity as we enter the new year and our pipeline remains strong.

“At LDC, we ended 2024 with our exit of Lomond Group after a transformative, six-year partnership. This is one that we’re incredibly proud of as we helped the management team to scale what was a regional lettings and estate agency business into a market-leading, multi-brand, national player. The team there delivered phenomenal growth – completing 65 acquisitions, growing from 600 to 1,900 employees and increasing their properties under management from 22,000 to more than 50,000 – and the transaction delivered a return of 3.5x. There’s still so much more to come and that’s why we’ve since reinvested to continue to support their growth journey.

“Lomond wasn’t the only business in our portfolio pursuing a buy-and-build strategy. Gateshead-based Aspire Technology Solutions kickstarted the year with the strategic acquisition of Cloud Cover IT to strengthen its presence in Scotland and broaden its customer offering, before closing 2024 with the acquisition of CloudCoCo in a move that further expanded its UK reach.

“And, as a team, we were proud to be named Private Equity Firm of the Year at North East Dealmakers Awards, and to be recognised for our partnership with Newcastle-based iamproperty, which we’d exited in 2023 following a partnership that helped the business to more than triple revenues. None of what we do would be possible without the strong local advisory community here – we’re grateful to have built excellent relationships that will continue to support dealmaking into 2025 and beyond.”

How do you expect the market to develop in 2025 – specifically with regards to the outlook for M&A?

“Like others around the country, the North East market is likely to be buoyed by the fact that we now have greater clarity over government policy. Many businesses will now be in a better position to move forward with growth plans and investment decisions, which drives confidence and fuels activity.

“Where businesses are coming to market, we’re already seeing strong appetite for partnering with private equity. At LDC, the combination of our on-the-ground presence and national sector expertise means we’re well-placed to provide the investment and support management teams are looking for to grow organically and through acquisitions. The picture for this year is looking bright.”

 What do you see as the key trends in 2025?

“I expect buy-and-build to remain a popular growth strategy for businesses across the North East, as they look to expand into new geographies and service lines or consolidate their market share.

“Development capital investments are also likely to remain a key feature of the M&A market as smaller businesses move beyond the start-up phase and kick start the next stage of their growth plans, whereas management buyouts continue to be a popular investment option for the management teams of fast-growing businesses in the North East. As economic conditions continue to stabilise, I’d expect this to continue.

“When it comes to sectors, stronger multiples in sectors like technology should support improving transaction volumes and there are lots of quality businesses coming to market. The pipeline for 2025 is healthy.”