Mergers and aquisitions (M&A) activity in the UK logistics and supply chain management sector has hit a quarterly five-year high, following a steady decline in deal volume in the previous three quarters.

The report, dubbed UK M&A Update Q3 2024 Logistics and Supply Chain Management, revealed that 27 deals were completed between July and September, mirroring levels only seen in Q4 2023, marking the highest quarterly number of deals recorded in the last five years.

Nearly half (44%) of the deals involved an overseas acquirer, an increase from 38% in the last quarter, the report found.

Significant deals included French Stef Group growing its UK presence, with the acquisition of Long Lane Deliveries through its UK subsidiary Langdons.

Meanwhile, almost half (48%) of transactions involved either a private equity investor or PE-backed buyer, demonstrating the continued interest from equity investors in the sector. 

According to the report, disclosed deal values increased significantly during the third quarter of the year to £2.8bn - a rise of £1.8bn compared to the previous quarter.

However, this was heavily skewed by the £2.7bn acquisition of Evri by Apollo Funds. 

The research also showed that tech-enabled logistics businesses have continued to attract trade buyers, such as Aptean Inc and Kerridge Commercial Systems. During Q3, there was a significant rise in tech-enabled transactions, increasing from 33% in the last quarter to 41%. 

Jason Whitworth (pictured), BDO LLP M&A partner, said: “The high number of deals recorded in the third quarter of 2024 reflects the continued recognition of value through scale and consolidation.

“Appetite for big ticket deals dominate the headlines and provide us with clear insight into the key drivers when it comes to M&A. Consistently, these have centred around creating operational efficiencies, strengthening territorial coverage, driving home market leadership, while providing additional capabilities and resource.”

Whitworth added: “Our recently launched Logistics Confidence survey highlighted a higher level of confidence across the sector. This was driven by the expectation of a more stable and manageable trading environment.

“The industry has also built up its resilience having navigated and operated essential supply chains in consistently demanding economic conditions. 

“Only time will tell how much the Autumn Budget changes will impact the sector, but there’s no doubt that it will put added pressure on operational costs from April next year, with the increase to Employer National Insurance Contributions requiring businesses to react to maintain earnings and value.

He added: “On a positive note, freezing fuel duty for one year and extending the temporary 5 pence cut to 22 March 2026 will save the average heavy goods vehicle £1,079 next year. The government has also made a strong commitment to ‘rebuild Britain’, including £1.6bn of funding to fix the roads in England.”

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