- Deal activity in the logistics and supply chain management sector fell in Q4, following the record highs of the previous quarter.
- Despite the decrease in deal activity in the final three months of 2024, it was a strong year for dealmaking in the sector.
Deal volumes in the UK logistics and supply chain management sector hit a record high in 2024 in a strong year of dealmaking, with 93 deals completed in the logistics sector. This is a 15% increase on deals completed in 2023.
Transaction volumes in Q4 2024 fell to 19 deals, compared to a quarterly five-year high of 27 seen in the previous quarter. However, there remains a strong appetite for deals, particularly from international investors.
Total disclosed deal value for Q4 2024 was also considerably lower than the previous quarter. This is largely attributable to a high value in Q3 driven by the acquisition of Evri by Apollo Global Management Inc for £2.7bn.
According to the latest report from accountancy and business advisory firm BDO LLP, the ‘UK M&A Update – Q4 2024, Logistics and Supply Chain Management’, in the final quarter of the year, the majority of transactions in Q4 were trade deals and 58% were cross-border – an increase from 44% in Q3. Notable transactions were Green Fulfilment’s acquisition of Omni Channel Fulfilment; InPost SA’s acquisition of the remaining 70% shareholding in Menzies Distribution group; and Schenk’s acquisition of Suttons Tankers. Private equity appetite in the sector continued and there were several direct investments, whilst several of the trade acquisitions were by PE-backed businesses.
The report also showed that technology remains a key driver in the sector, with 42% of deals tech-related.
Jason Whitworth, M&A partner at BDO LLP, explained: “The drop in deal activity in Q4 undoubtedly reflects a forward pull on deals to complete ahead of the Autumn Budget. The market was also digesting the budget announcements, notably the impact of the increased costs that will be incurred by businesses in the form of higher National Insurance Contributions and minimum wages. That being said, there remains a strong appetite for deals, particularly from international investors accessing and consolidating in the UK.”
Prominent cross-border Q4 deals included Aptean Inc acquiring Indigo Software Ltd; while Deutsche Post and Fracht AG also acquired in the UK, snapping up Brandpath Group and Quality Freight Ltd respectively.
Whitworth said: “As we get into the full swing of 2025, the improving confidence highlighted in our UK Logistics Confidence survey in October 2024 appears to have been dented. Increased costs and the less benign economic outlook have increased the pressure on the industry. Alongside other significant operational changes, 2025 looks like it will be particularly challenging.”
Following the inauguration of President Donald Trump, UK businesses are being urged to prepare for potential supply chain disruptions and rising trade costs, as uncertainty looms over future US trade policies. A recent BDO survey of 500 mid-market businesses revealed that supply chain disruptions are amongst the top challenges UK businesses face and it is expected that mitigating supply chain risks will become a key priority in the coming 12 months.
Whitworth added: “With this continued uncertainty and challenge comes opportunity for those building on effective and quality service, and we anticipate that capital rich investors and trade will continue to drive increased investment activity as the focus shifts to increased technology enablement and consolidation of supply chain services to drive efficiencies.”
