Tech remains most attractive sector
Top sectors by number of high growth M&A deals in the South East
Acquisition activity is well spread out in terms of sector. Companies in the South East operating in the 'Analytics, Insight and Tools' sector saw the most M&A deals completed in 2023, with 15 companies sold, representing 11% of the total. Companies in this sector often operate on a Software-as-a-Service (SaaS) model. SaaS and Food and Drink Processers were tied as the second most active sectors for acquisitions both in the South East and across the rest of the UK in 2023. Companies in the 'Analytics, Insight and Tools' sector range from platforms for drug discovery, to cybersecurity analytics platforms, to new AI platforms. This sector is attractive because of its AI applicability, as well as its recurring revenues business models. This is further compounded in a recessionary environment when investors tend to see B2B propositions as more stable than consumer products.
"The technology sector in the South East is incredibly strong. Tech companies remain attractive to investors and, increasingly, we are seeing large corporates acquiring small tech service providers. AI is set to the be the big growth area of 2024. It effects all sectors of the economy from financial services to manufacturing to public sector to online service providers. It also increasingly affects our daily lives whether at work, at home or on the go. And finally, it affects our democracy: 2024 will almost certainly see the UK go to the polls in a general election. Expect tech, and particularly AI, to be a key political battleground whenever productivity, the economy and national growth is being debated and expect AI to play a big part in political campaigning. Companies with unique AI solutions and services will become hot property in M&A during 2024."
Matthew Holman, Partner, Technology
Still a fine year for food and drink!
Food and Drink Processers saw a higher proportion of activity in the South East than elsewhere in the UK. The prominence of this sector in the South East is helped especially by the county of Kent which is home to the highest proportion of Food and Drink startups and scaleups in the South East with 18% of the population (3% of England’s population).
Analytics, Insight and Tools
Idox’s acquisition of eMapSite (2023)
Incorporated in 2022, Surrey-based eMapSite provides insights and analytics based on location data and location services, which allows clients to access digital mapping and geographic information. In 2023, eMapSite was acquired by software firm Idox for £15.8m.
Analytics, Insight and Tool
Envisions’s acquisition of OKRA (2023)
OKRA was just five years old when it was acquired. OKRA developed software designed to utilise artificial intelligence to enhance the speed of data analysis and offer insights and predictions based on the data. It was acquired by Envision Pharma Group in February 2023.
Analytics, Insight and Tool
Regnology’s acquisition of Metadata Technology (2023)
Metadata Technology, which was based in Godalming, developed statistical data management software that uses SDMX (international standard for describing official statistics), designed to enable its clients to report, integrate and exchange data and perform business analytics on the data available. The company had received a grant from the EU before being acquired in May 2023.