2022 Q3 Logistics & Supply Chain Sector M&A Update: M&A activity falls for the third successive quarter
M&A activity in the UK logistics and supply chain management sector has fallen for the third successive quarter, after hitting a record high in Q4 2021.
Excluding mid-2020 in the peak of the pandemic, figures for the third quarter are at their level lowest since 2018, with 12 deals completed between July and September – 17% of which were cross-border. This compares with 15 in Q2 and the highs of Q4 2021(20). Private equity activity in the last quarter also fell, although the influence of investors is still prevalent as acquisitions are being made by PE-backed businesses.
Jason Whitworth, M&A partner at BDO LLP, said: “Our recent BDO-Barclays Logistics Confidence Index saw the score slip from last year’s highly optimistic score of 62.5 to 50.4. This reflects a sense of realism in the market as it readjusts to the challenges of high inflation, soaring fuel and energy prices and a more uncertain economic landscape. Interestingly, despite these challenges, mergers and acquisitions continue to be a strategic priority for logistics companies, with 45% of respondents reporting that they were likely to make an acquisition in the next 12 months - the highest figure ever recorded in the survey’s 10-year history.”
“However, the levels of uncertainty in the current market are making deal do-ers cautious, particularly around valuing future earnings. Buyers are nervous of overpaying, as a market shifting with fragile consumer confidence means future market share post-acquisition is difficult to predict.”
“While interest in quality assets is tempered, there remains the opportunity to target strategic assets. Meanwhile, a number of businesses may be anticipating the prospect of acquiring distressed businesses, and waiting as economic pressures continue to bite.”
The BDO FTSE Logistics Index dropped by 26% in the last quarter and over the three-year period is now tracking behind the wider FTSE All-share index, which has fallen by 5% in the last quarter.
The 2022 edition of the BDO & Barclays Logistics Confidence Index presents the results of our survey of the views and insights of 100 senior decision makers, to assess confidence and expectations, as well as the latest hot topics and longer term trends, in the UK logistics sector. Read the report here.
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WEBINAR: LAUNCH OF THE 2022 UK LOGISTICS CONFIDENCE INDEX
Watch our webinar for the launch of the latest edition of the BDO-Barclays Logistics Confidence Index 2022, with speakers from BDO, Barclays and industry guests from PC Howard, Simarco and Clipper.
Previous M&A annual reports and market snapshots for the logistics and supply chain sector:
- Q2 2022 Update
- Q1 2022 Update
- Q4 2021 Update
- Q3 2021 Update
- Q2 2021 Update
- Q1 2021 Update
- Q4 2020 Update
- Q3 2020 Update
- Q2 2020 Update
- Q1 2020 Update
- Q4 2019 Update
- Q3 2019 Update
- Q2 2019 Update
- May 2019 M&A Review
- Q4 2018 Update
- Q3 2018 Update
- Q2 2018 Update
- May 2018 M&A Review
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