The UK logistics sector has reached a milestone, witnessing a five-year high in merger and acquisition activities in Q3 2024.
- A total of 27 deals were completed between July and September, a rise attributed to a notable increase in international acquisitions.
- Private equity plays a critical role, representing almost half of the transactions in this sector, signalling sustained investor interest.
- The quarter’s disclosed deal values totalled £2.8 billion, significantly bolstered by Apollo Funds’ acquisition of Evri.
- There is a marked rise in tech-enabled logistics transactions, reflecting a growing trend towards integrating technology in logistics.
The logistics and supply chain management industry in the UK has experienced a notable surge in merger and acquisition activities during the third quarter of 2024, reaching its highest point in five years. This upturn follows a period of declining deal volumes over the previous three quarters. The recent uptick is characterised by 27 deals completed from July through September, a level of activity comparable only to the end of 2023. Notably, 44% of these transactions involved an overseas buyer, up from 38% in the previous quarter, underscoring a growing international interest in the UK’s logistics sector.
Private equity firms have shown a consistent appetite for UK logistics companies, accounting for nearly 48% of the transactions. This demonstrates a persistent interest from equity investors looking to capitalise on the sector’s growth potential. The report highlights significant deals during this period, including the French Stef Group’s acquisition of Long Lane Deliveries through Langdons, its UK subsidiary. The total disclosed deal value for the quarter reached an impressive £2.8 billion, a figure skewed by Apollo Funds’ substantial £2.7 billion purchase of Evri. The acquisition was fiercely competed for, notably involving Chinese firm JD.com and logistics giant DHL.
The logistics industry has witnessed a remarkable rise in tech-enabled transactions, recording an increase from 33% in the previous quarter to 41% during Q3. This trend underscores a significant shift as logistics companies increasingly seek to enhance operational efficiency and market reach through technological advancements. Companies like Aptean Inc and Kerridge Commercial Systems have been active in acquiring such tech-driven businesses, indicating a strategic focus on innovation.
BDO LLP M&A partner Jason Whitworth attributes this increased merger activity to a broader recognition of the value created through scale and consolidation. He notes the industry’s emphasis on creating operational efficiencies and expanding market dominance, while also acquiring additional capabilities and resources. Whitworth highlights a renewed confidence within the sector, driven by expectations of a stable trading environment under the Labour government. The sector’s resilience, having managed through challenging economic conditions, is also a factor. Although the Autumn Budget introduces challenges such as increased Employer National Insurance Contributions, some relief comes from the government’s commitment to freezing fuel duty for a year.
Q3 2024 has cemented its place as a pivotal period for UK logistics, showcasing significant growth and a shift towards tech-driven operations.
