East Anglia businesses seek private equity funding in growth push

Nearly a third of businesses in East Anglia are looking for private equity investment, in a bid to achieve post-pandemic growth and take advantage of opportunities.

According to BDO’s latest Rethinking the Economy survey of 500 mid-sized companies, 30% of companies are actively looking for an investor.

The survey showed that the biggest driver for seeking external investment is the ability to develop new products and services (43%). This was closely followed by additional funding to cover immediate costs (33%), while a third of East Anglia businesses (33%) admitted the benefit of private equity investment was the ability to expand through M&A.

John Gethen, M&A director at BDO in East Anglia, 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 East Anglia businesses to move into new markets, seize upon organic growth opportunities 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 East Anglia companies in 2021 is access to funding, with nearly a third admitting this was a barrier to expansion. Repaying COVID-related debts was also cited as a significant issue.

Vinny Patel, corporate finance director at BDO added: “There are still considerable challenges that exist for East Anglian companies in making the transition from recovery to growth. However, with an overwhelming 90% 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 growth in the coming months. As such, we anticipate a further influx of private equity capital into East Anglia, as well as high levels of other deal activity, in the next 12 months across key sectors.”

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