Deal activity in the Yorkshire logistics sector remains strong in the first half of 2021, despite a much-publicised skills shortage hampering the market.

Transaction volumes in H1 rose by 25% on last year’s figures, with 30 deals completed in the UK from January to the end of June 2021 (24 in H1 2020). According to the latest report from accountancy and business advisory firm BDO LLP, activity in Q2 was consistent with the previous two quarters, with 15 transactions being completed.

Deals include the acquisition of Thorn 3PL Services by York-based outsourced business services company, Mosaic; and the sale of B2B specialist courier and logistics firm, Techlogico, based in Pontefract, to on-demand logistics tech platform, Shift.

The ‘UK & Ireland M&A Update – Q2 2021’ report revealed that 27% of deals were cross-border, with the same number attracting private equity investment.

In addition, the BDO Logistics FTSE Index continues to bounce back and is now 120% ahead of where it started in 2019. The Logistics index remains significantly ahead of the wider market. In comparison, the FTSE all-Share Index was 4% down during the same period.

Jason Whitworth, M&A partner at BDO LLP, explained: “The much-publicised skills shortage has taken centre stage in the current market – both across warehousing and haulage. While the driver shortage has hit the headlines, with labour costs also rising in the warehouse, the market continues to show resilience, with the importance of an effective supply chain coming into clear focus.”

He continued: “Investors and operators are recognising the potential for value for businesses in growth sectors of the market and getting their operational delivery right. This is reflected in both capital market and transaction valuations, which remain high, as both trade and equity investors seek to scale up.

“Unsurprisingly, H1 deal activity has surpassed last year and is supported by continued interest in building scale, while targeting niche markets. The challenge over the next few months will centre around how operators manage peak periods, given the current skills and supply pressures, and this is likely to be reflected in future market analysis by BDO.”