Analysis By Irwin Mitchell Reveals Volumes Were The Highest Since 2018

The volume of corporate deals within the UK’s hospitality sector was at its highest level for five years in 2022, according to analysis by national law firm Irwin Mitchell.

Irwin Mitchell has examined Experian’s MarketIQ database and revealed there were 160 corporate transactions during 2022 in the food and beverage services sector.

The analysis which included mergers and acquisition (M&A) activity amongst restaurants and pubs revealed that the number of completed transactions was the highest it had been since 2018. Looking back at the last 10 years, the only other 12 month period when activity was stronger was in 2016.

Reflecting the impact of the Covid lockdowns, the number of deals in 2021 stood at just 104 and the year before that the number was 140. The figure for 2022 was only surpassed in 2018 (178) and in 2016 (185).

Out of the 160 deals that completed in 2022, 63% were acquisitions and 16% involved development capital being injected the business to support growth. 5% of the deals involved an investor being bought out whilst a similar proportion were restructuring / refinancing deals.

Acquisitions made up a similar proportion of the 104 transactions in 2021 (65%) and development capital represented 13.7% of transactions in the sector. There were however no restructuring/financing deals reported during the period.

Expert Opinion

“Despite 2022 being one of the most challenging for the hospitality sector, hotel owners and restaurant operators were still on the lookout to complete deals and grow their portfolios through M&A. There were signs of a slowdown in activity in the final quarter but with economic uncertainty being at its highest at that point, it is understandable that volumes reduced. Although the number of insolvencies across the sector have increased recently, there are plenty of forward-looking organisations that are looking to invest in the future and take advantage of some undervalued assets.” Victoria Zivkovic, Corporate partner