Review of 2024 and look ahead to 2025 for South

As featured in Insider.

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

“M&A activity in 2024 has been steady, despite the challenges facing the dealmaking market – which is a real sign of the strength of the business community here in the South East.

“At LDC, we invested in Brighton-based software developer 15below and cloud service provider Creative ITC to support their organic and acquisitive growth strategies. We also exited cloud and digital services provider Kerv following a transformational growth journey, during which the business grew revenues five-fold and increased headcount by 600% – the transaction generated an IRR of 45%. The Kerv management team has even more to come and we’re continuing to support them following our reinvestment.

“Our portfolio’s performance remained robust as well, and we supported five acquisitions in 2024. One notable example was IT and Cyber Security technology services provider Acora’s acquisition of data science and AI service provider Elastacloud, a move that significantly enhanced Acora’s customer offering and put the business at the forefront of technological and service innovation.

“Alongside transaction activity, our team in Reading is also incredibly proud of our long-standing support for Berkshire-based Camp Mohawk who provide a place for children and young people with special needs to learn and achieve their potential.”

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

“Greater certainty around the political and economic landscape will buoy the South East’s M&A market in 2025, something we’re already seeing in our own investment pipeline.

“Our region is home to companies from some of the UK’s fastest growing and most innovative sectors, so it’s an exciting time to do business here. Technology is a great example and I expect the sector to be a hotbed for investment in 2025.

“Niche specialist software providers have been particularly popular with private equity firms over the last 12 months and 15below is a great example. The business provides hyper-personalised, automated passenger communications for the travel industry to improve customer experience. We’ve also seen a growing interest in business services companies that provide regulatory and compliance support, an area many investors are looking at as the regulatory burden across other sectors intensifies.

“And it’s been positive to see an increase in consumer and leisure businesses coming to market in 2024, with this sector having been slower to recover than others post-Covid, and we’re likely to see more activity from such businesses over the course of 2025.”

What do you see as the key trends in 2025?

“The mood music for the M&A landscape in 2025 is confidence. The advisory community is more confident with the businesses they are bringing to market and management teams across the region are also more confident in their own growth ambitions. This bodes incredibly well for the South East.

“We’re also seeing development capital investments become increasingly popular, as small businesses that are past the start-up stage look to accelerate growth. We’re well-placed to meet this demand and will continue to help management teams across the region to realise their ambitions.”