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Midlands Private Equity Growth Barometer 2020

07 February 2020

TOP 50 PRIVATE EQUITY-BACKED BUSINESSES BOOST MIDLANDS ECONOMY BY ALMOST £1 BILLION
  • The top 50 fastest growing private equity-backed businesses in the Midlands have a significant impact on the region’s economy, growing revenues by almost £1 billion since 2016.
  • Wolverhampton’s Pallet-Track tops the table with average compound growth of 48%. 
  • The manufacturing, technology and media, support services and transport sectors make up 62% of the top 50, with a total of 11 sectors represented as the Midlands continues to show a diverse investment scene.

The Midlands Private Equity Growth Barometer, which has been released today, highlights the region’s 50 fastest-growing private equity-backed businesses based on turnover growth in the past three years. 

The top 50 PE-backed businesses have made a considerable impact over the last three financial years, adding almost £1 billion to the regional economy, with combined revenues rising from £1.7 billion to £2.7 billion.
Following that trend, the data also reveals that those businesses have contributed positively to employment in the Midlands, adding almost 6,000 jobs since 2016, taking the current numbers employed by the 50 fastest growing PE-backed companies to 21,400 people.

Taking top spot – based on compound annual growth rate (CAGR) of turnover in the last three years - is Wolverhampton-based Pallet Track. The company, which has developed cutting-edge tracking systems with the help of backing from TPA Capital, has achieved 48% CAGR since 2016. It is closely followed by Tramlink Nottingham Limited (40%), Biocomposites Limited (34%), Ballast Phoenix Limited (34%) and Creative Care Options Limited, which completes the top five with 31% CAGR.

Despite private equity funding falling in the region between 2016 and 2018 – from just under £1.5 billion to £629 million – the Midlands continues to attract a significant number of investors, with 101 companies receiving PE backing in 2018, thanks to the region’s expertise in key sectors and a vibrant start-up scene. 

Andrew Mair, partner, assurance & business advisory and author of the report, commented: “The emergence of sectors, such as tech and media and support services and transport is helping to create a diverse and rich investment scene Midlands-wide, despite the political uncertainty and concerns around Brexit businesses have experienced in recent years. This demonstrates that, although PE funding has fallen in real terms, there is still a positive appetite from investors across the world for new markets, as well as the more traditional sectors, such as manufacturing. 

“While official figures show a drop in PE-funding to £629 million in 2018, it’s important to set those figures against a backdrop of investments versus divestments and the natural PE lifecycle of investments being realised. Although we have seen a reduction in mega deals in the last 12 months, the mid-market continues to see high levels of deal activity and, with a diverse range of investors in the top 50, it’s clear there is still plenty of business to be done in the region.”

ENDS

About the Report 

The Private Equity Growth Barometer, now in its second year, aims to uncover the details of this diverse landscape through a unique analysis of data, exclusive interviews with leading private equity-backed entrepreneurs, insights from the movers and shakers in the PE investor community and starts to build a picture of trends

 The companies included in the Midlands Private Equity Growth Barometer were collated using FAME, Pitchbook, BVCA data and Companies House for companies primarily based within the Midlands postal areas (‘the region’). 

The financial information in this report has been compiled exclusively from publicly available information applying the key assumptions and limitations outlined above. It has been designed solely to illustrate trends in the financial performance of a representative sample of companies in the region. 

BDO has not carried out any verification work on the financial information in this report and gives no opinion on the financial information. BDO makes no claims, promises or guarantees about the accuracy, completeness or adequacy of the contents of this report. 

No reliance should be placed on the information contained in this report and, to the fullest extent permitted by law, BDO does not accept or assume any responsibility to anyone for the information contained in this report. 
BDO has made a number of judgements in aggregating the information into a consistent format. BDO does not, and cannot, warrant the completeness or accuracy of the adjustments made during the aggregation.

Note to editors

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We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.  

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