According to data from corporate finance advisory firm Oghma Partners, 151 deals took place last year, up from 117 deals in 2023.
Even excluding the acquisition of Britvic by Carlsberg, which was announced last year but only closed this month, total deal value increased by 31% year-on-year during 2024, reaching an estimated £2.7bn.
Of the more than 150 deals that were completed, nearly 70% had an estimated value of £10m or less, while just 9% of transactions came in above £50m – far below the five-year average of close to 14%.
In terms of geography, oversees buyers were responsible for 12.6% of deals, down from 18.8% in 2023 and lower than the five-year average of approximately 17%.
Mark Lynch, a partner at Oghma, said that despite the rise in deal numbers during 2024, activity continued to be impacted by geopolitical and economic uncertainty, as well as persistent inflationary pressures and stagnant economic growth.
“One of the biggest challenges to valuations has been high interest rates, which were initially expected to decline in early 2024 but have remained elevated,” Lynch explained.
“The higher cost of debt has limited the ability of companies to raise affordable financing for acquisitions, leading to reduced competition for assets and, in turn, putting downward pressure on valuations. M&A activity in the second half of 2024 was heavily influenced by the October Budget, as sellers anticipated negative changes to capital gains tax.”
Against these headwinds, Lynch said that M&A activity in 2024 was driven primarily by smaller deal and the acquisition of distressed assets by bigger players. However, he believes that this year will see more consequential transactions completed.
“Companies with strong supply chains and exposure to high-margin markets are key targets,” he continued.
“Despite pent-up demand from private equity, current activity favours value driven opportunities over large-scale deals. While larger deals may take time to return, buyer interest is there, with many preparing to deploy capital as the right opportunities emerge.”
The plant-based category has seen plenty of consolidation in recent years and Lynch said that it is now entering a phase of “intensified competition”.
“The plant-based and meat-free market is becoming increasingly polarised, with strong performers thriving and weaker players struggling,” he commented.
“Successful M&A stories like Rude Health and The Tofoo Co. highlight the importance of strong management, solid brand positioning, and meeting consumer demand for plant-based options with good nutritional profiles. This shift towards health-conscious products is driving value in the sector. Meanwhile, brands like Allplants and VBites exemplify the challenges within the market.
“Brands with strong leadership and sustainable business models will continue to be attractive, while weaker players may face increased pressure, leading to consolidation or exit from the market.”
