Private equity-backed North East businesses showing growth

New data shows a 99 per cent rise in earnings over the last three years, highlighting the impact of private equity investment on the region’s economy.

The second Private Equity Value Report, published by Real Deals and developed in association with BDO, identified seven qualifying North East businesses based on average annual earnings before interest, taxes, depreciation, and amortisation (EBITDA).

Five of these ranked among the top 245 private equity-backed companies in the UK, achieving average EBITDA growth of 122 per cent.

ABCA Systems, a fire and security business backed by Trimountain and Cambridge Capital Partners, topped the North East list.

BDO commissioned the research to explore how private equity investment supports growth in the UK economy.

The findings are based on the past three years of accounts filed with Companies House.

Nick Millward, tax partner at BDO, said: “The North East is home to some impressive private equity-backed businesses that are making a real impact.

“These companies are driving growth and have also shown remarkable resilience during challenging times.

“Their ability to adapt and thrive through periods of uncertainty highlights their strength and potential in the market.

“The North East’s diversified sector exposure, job creation and growth ensures that is not dependent on a single city or industry.

“The region illustrates the potential of growth-led value creation to ensure the future success of individual companies and the region’s economy as a whole.”

One of the fastest-growing mid-market businesses in the region is Dyer Engineering.

Backed by Maven Capital Partners since 2019, Dyer has posted an EBITDA compound annual growth rate (CAGR) of 175 per cent.

The company has evolved into a global speciality engineering business serving the energy, defence, transport, and manufacturing sectors.

Michael Vassallo, partner and leader of the North East investment team at Maven Capital Partners, said: “In addition to pure organic growth plays, we are also now focussing more on buy-and-build as a means of growing value.

“This is in part due to the ongoing pressures on the economy which have elongated buying cycles in some sectors, in which case acquisitions can be a faster route to growth.”

The top five fastest-growing mid-market businesses in the North East are:

ABCA Systems Dyer Engineering Vision for Education Pacifica Group Everflow Nationally, private equity portfolio companies recorded average EBITDA growth of 50.6 per cent and revenue growth of 21.7 per cent over the same period.

All of the top five North East firms operate in the business products and services sectors.

Each has been backed by a range of investors.

The report analysed UK companies that were private equity-backed as of December 31, 2022.

It focused on businesses with a turnover between £10 million and £300 million and positive EBITDA.

The research included companies with group-level accounts filed during the three financial years from 2022 to 2024.