Review of 2024 and look ahead to 2025 for West Midlands

As featured in Insider. 

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

“M&A activity across the West Midlands has been through ups and downs in 2024 and while the landscape has undoubtedly been challenging over the past couple of years, we are now seeing green shoots in the market and I’m optimistic about what 2025 will bring.

“This year we’ve invested in Dudley-based lift repair and maintenance company Deltron, to help the management team to expand its services and make complementary acquisitions. We also exited our investment in IGG, a provider of professional pensions trusteeship and governance services, following a successful partnership which supported an increase of more than 300% in revenues and headcount. The IGG management team has delivered exceptional growth and we are continuing to support their journey following our reinvestment.

“Buy-and-build activity has also continued. Our portfolio companies in the region completed six strategic acquisitions over the last 12 months, with Deltron completing five of those in the first few months following our investment. It remains a popular strategy to drive geographic or service line expansion.

“Alongside transaction activity, our Birmingham team has remained committed to giving back to the local community. We’ve continued to support local charities, including Kids Village, Birmingham Children’s Hospital and Birmingham Hippodrome, and this remains something I’m incredibly proud of.”

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

“In 2024, we saw a bifurcation of the market. There was intense competition for the most high-quality assets, while businesses with weaker fundamentals struggled to find buyers. In the near term, we expect this focus on quality to continue. Management buyouts have and will continue to be a key feature of the landscape and I also expect to see a continued focus on buy-and-build.

“Greater clarity over policy following the election and the budget is driving a more stable environment for businesses, and improving business confidence will no doubt support increased M&A activity.

“Looking ahead to 2025, we have a healthy pipeline of activity and given the relationships we’ve built with the local business and advisory community, we’re well-placed to increase activity as the dealmaking landscape becomes more vibrant.”

What do you see as the key trends in 2025?

“Our region is home to a wide variety of sectors, and we’re excited about the growth of the technology sector here.  The West Midlands is home to UK’s largest technology hub outside of London, with some of the sector’s most innovative businesses, and I’m confident these will continue to attract attention in 2025. We’re seeing this play out across our own pipeline, with more technology businesses coming to market than ever before.

“Robust sectors such as healthcare and industrials will also continue to attract investment. The West Midlands’ status as a leader in innovation across both industries could be supported by the government’s focus on healthcare and soon to be launched industrial strategy, which is due to be published in the spring, and broader focus on areas such as improving local infrastructure.

“On the ground, we’ve seen the West Midlands advisory community evolve significantly and we’re expecting this to continue in 2025. Firms are investing in their regional teams, while also expanding their sector focuses – deepening the support available to businesses. This reflects our own regional model, which benefits from the experience of our national sector teams.”