4:00 AM 15th September 2021
Yorkshire Businesses Seek Private Equity Funding In Growth Push
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According to BDO’s latest Rethinking the Economy survey of 500 mid-sized companies, 23% of businesses are actively looking for an investor; more than half (53%) have already secured private equity funding since the onset of COVID-19.
The survey showed that the biggest driver for seeking external investment is the ability to develop new products and services (37%). This was closely followed by funding for organic growth opportunities (30%), while nearly a third of Yorkshire businesses (30%) admitted the benefit of private equity investment was expansion through M&A.
Terry Jones, Head of BDO in Yorkshire and the North East, said: “From a private equity perspective, the UK is very much ‘for sale’ at the moment, with PE buy-outs at record levels during the first six months of 2021.
“Growing investor appetite, coupled with a substantial investment pot, means any pent-up demand from regional companies is likely to be satisfied by an injection of private equity funding, as businesses look to scale-up quickly in the wake of the coronavirus pandemic.
“This type of investment will allow ambitious Yorkshire businesses to move into new markets, balance any outstanding debt, and strengthen their workforce at pace, as the regional economy aims to recover post-pandemic.”
The Rethinking the Economy survey showed that one of the greatest barriers to growth for Yorkshire companies in 2021 is access to funding, with nearly a fifth admitting this was a barrier to expansion. Recruitment and repaying COVID-related debt were also cited as a significant issues.
Terry added: “There are still considerable challenges that exist for Yorkshire companies in making the transition from recovery to growth. However, with 77% of mid-market businesses stating that now in the right time to invest - set against a growing appetite from private equity firms to invest in the region - there is clear momentum in the market as we push towards recovery in the coming months. As such, we anticipate a further influx of private equity capital into Yorkshire in the next 12 months across key sectors.”