North West businesses seek private equity funding in growth push 

• Nearly a quarter of mid-sized North West businesses are actively looking for private equity investment
• Expansion through M&A is one of the top three drivers for securing external funding
• 87% of North West businesses think now is the right time to invest.

Nearly a quarter of mid-size North West businesses are looking for private equity investment, in a bid to achieve post-pandemic growth.

According to BDO’s latest Rethinking the Economy survey of 500 mid-sized companies, 23% of businesses are actively looking for an investor.

The survey showed that one of the biggest drivers for seeking external investment is expansion through M&A (27%), together with funding for organic growth opportunities (27%). The same number of North West businesses admitted the benefit of private equity investment was the ability to move into new markets.

Chris Heatlie, corporate finance partner at BDO in the North West, 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 North West businesses to develop new products and services, 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 North West companies in 2021 is access to funding, with more than a quarter (30%) admitting this was a barrier to expansion. Internal and customer confidence were also cited as significant issues.

Heatlie added: “There are still considerable challenges that exist for certain other North West companies in making the transition from recovery to growth. However, with an overwhelming 87% 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 the North West in the next 12 months across key sectors.”