Stockton-on-Tees’ Infinity Bridge, opened in 2009, was funded by Stockton Borough Council, English Partnerships, the Homes and Communities Agency (now Homes England), One NorthEast (abolished in 2012), and the European Regional Development Fund
Last year was a tough one for the M&A market in the North East. The region recorded 265 deals in 2025, according to Experian, down from 334 transactions in 2024. Only Wales and Northern Ireland posted fewer deals. The fall in deal value was even more pronounced, down from £4.5bn to just £764m last year – a significant drop even after you discount the outlying £2.9bn acquisition of Newcastle-headquartered Virgin Money by Nationwide in 2024.
But the headline numbers, as ever, don’t tell the full story. Although year-on-year statistics are less than encouraging, advisers, dealmakers and business owners in the North East are quietly optimistic about the longer-term picture.
Resilience and potential
According to KPMG’s annual Private Enterprise Barometer, more than nine out of 10 business owners in the North East are confident about growth – that’s more than any other northern region and above the UK average. They cited rising demand for products and expansion into Europe amongst their reasons for optimism in the region.
NE owner-managers have taken Covid, rising interest rates and tariffs in their stride
“The business community in the North East has been incredibly resilient through a period of prolonged uncertainty,” says S&W director Chris Hird. “Owner-managers have taken Covid, geopolitical conflicts, rising interest rates and tariffs in their stride, and are continuing to excel.”
Lee Humble, UK head of corporate finance at Azets, also believes the region has huge potential. “The North East is resilient, it’s primed, and it’s undervalued,” he says. “There are outstanding businesses and leadership teams here, and the opportunity is bigger than most people realise.”
But the strongest vote of confidence in the North East doesn’t come from industry surveys or adviser testimonies. It comes from dealmakers investing in boots on the ground.
Foresight Group announced the opening of a Newcastle office in 2023, as part of plans to grow its investment portfolio in the region, and LDC moved into its new Newcastle base in 2020. More recently, BGF bolstered its North East team by hiring investment director Scott Johnston.
Mid-market PE firms are committing to the region, opening offices and building teams
“Historically, many mid-market private equity firms covered the North East remotely. Now, many are committing to the region by opening offices and building teams,” says Grant Thornton partner Jim Whittaker, who leads its corporate finance team in Yorkshire and the North East. “A number of London-headquartered investors such as Trimountain, Synova and Perwyn have been active in the North East for some time alongside longstanding incumbents such as NVM. Their success in the region is often driven by members of their teams living and working locally, allowing them to build valuable relationships with corporates and advisers.”
Something for everyone
A big draw for buyout firms moving into the North East is the range of deal targets on offer. “There’s a broad mix of activity. It’s not a one-sector economy, there’s a real diversity, which makes the region more resilient through the cycles,” says Whittaker.
Although the region leans heavily on its industrial roots, businesses are evolving, augmenting their deep engineering skills and technical expertise with technology and digitalisation capabilities.
“We still have world-class manufacturers and engineering businesses producing to tolerances and quality levels that many competitors simply can’t match,” says Chris Wilson, corporate finance partner and head of deal advisory at UNW. “Traditional industrial capability is being enhanced through technology. Robotics, automation, and operational innovation are becoming core competitiveness drivers. We also see strong momentum in the circular economy – waste, recycling and aggregates – where industries are evolving and professionalising rapidly.”
Outside of the core industrials sector, a start-up ecosystem for high-growth technology and life sciences businesses has built up around the region’s excellent universities. At the forefront of the region’s innovation landscape is Durham University. Ranked third in the UK by The Times, its world‑class research and academic excellence have created a thriving ecosystem of high‑growth technology and life sciences start-ups across the North East. The region’s other leading institutions – Newcastle University, the University of Sunderland, Northumbria University, and Teesside University – each contribute talent, research capability, and industry collaboration opportunities.
The Glasshouse International Centre for Music in Gateshead and, above, Northumbria University, Newcastle
“The region has benefited from investment in pathways to fund and develop high-growth start-ups. Its universities are active innovation hubs, and they have been supported by corporate initiatives such as Barclays Eagle Labs that help incubate and scale new companies,” says Hird.
Spinout class
Recent spinouts that have successfully raised private sector investment – from Newcastle University alone – include: MarraBio, which is developing groundbreaking technology to produce alternatives to bioactive proteins; Ocular Systems, a 3D-printing particle management systems developer; and RecoVolt, which has developed a system for discharging electric vehicle batteries in preparation for recycling.
There are lawyers and advisers in the region who can go toe-to-toe with anyone
The region’s startup-friendly environment has, over time, boosted the pipeline for buyout opportunities in sectors such as technology and healthcare. Gateshead-based computing and AI services business Technology Services Group (TSG) is the standout deal of recent times. Acquired by the direct private equity investment arm of Geneva-based asset manager Pictet Alternative Advisors in 2024, TSG attracted strong interest from multiple buyers at auction – at a time when buyout capital deployment was otherwise subdued.
Since the 250-employee business was acquired, revenue and profit growth has been in the double digits, and the scaled platform has expanded its UK network through two acquisitions: Bristol-based Computer Geeks and Dayta in Aylesbury.
And in the healthcare space, the December 2024 merger of LDC portfolio company Connect Health and BGF-backed Healthshare created Cora Health, a healthcare services company, employing around 700 people, that is headquartered in Newcastle. “One of the biggest misconceptions is that the North East is a small market,” says Azets’ Humble. “It isn’t. There’s far more going on in the region than many outsiders appreciate.”
Support at hand
Dealmakers moving into the region have also found that the market is exceptionally well-served from an advisory perspective, with ample capability on hand locally to handle large, complex, cross-border deals.
“The quality of advice available locally is as strong as anywhere in the UK,” says UNW’s Wilson. “There are lawyers and advisers in the region who can go toe-to-toe with anyone nationally and internationally.”
Indeed, this is a market where local presence matters. Advisory rankings show that the most active advisers in the North East are based there, have well-established relationships and are networked into the local business community: Experian ranked UNW first for financial advisory and Grant Thornton second; for M&A legal advice, Ward Hadaway ranked first and Muckle second.
“One of the North East’s strengths is that it’s a collegiate, collaborative market. It’s not dog-eat-dog,” Humble says. “Deals here work best when they’re structured as win-win outcomes.”
Building trust and collaboration with peers, private equity investors and business owners is what makes the region tick, and those firms that invest in local teams and networks are rewarded.
“North East businesses want to work with advisers who are genuinely embedded locally,” says Grant Thornton’s Whittaker. “There’s been some retrenchment over the past 10 years from larger professional services firms across many UK regional markets, but for advisers prepared to commit, that creates opportunity in an increasingly attractive M&A market.”
No bridge financing?
“Grit”, says Azets partner Lee Humble, is the defining quality of business owners in the North East. But even the most resilient entrepreneurs have been frustrated by the lack of investment in the region’s infrastructure.
You can't assess this region purely on a narrow local footprint. People and businesses here stretch far wider than that
In December 2024, a concrete flyover on the A167, a key road artery linking North Yorkshire to Newcastle and Gateshead, was shut because it was at risk of collapsing. Traffic ceased and metro trains running underneath the structure were out of action for more than a fortnight. Demolition began last October.
The iconic Tyne Bridge, meanwhile, has been subject to closures since 2024, and won’t be open as normal until 2028 at the earliest. And a scheme to upgrade the A1 in Northumberland to a dual carriageway has been labelled “unfunded and unaffordable” – and cancelled.
“Government investment often feels like it stops at Leeds,” says Humble. “Beyond that, infrastructure is weaker, networks are weaker, and the North East simply isn’t being supported at the level it should be. Investment needs to be spread more fairly. You can’t assess this region purely on a narrow local footprint. People and businesses here stretch far wider than that.”
The compounding value generated by investment in infrastructure is exemplified by the capital that has flowed into Newcastle International Airport. At the end of 2025, a consortium of six banks provided a £364m financing package to refinance the airport’s bank debt and fund growth plans. The airport is forecast to serve a record six million passengers in 2026 and is in the process of expanding further. Forecasts put passenger numbers at nine million by 2040, contributing £1.9bn in gross added value to the North East economy.
Anatomy of a spin-out
In 2019, a group of Newcastle University professors set up a pre-clinical drug development business to transform how new medicines were tested before being tested on humans. After a competitive sales process that attracted strong interest from strategic and private equity bidders, that business was sold to Vespa Capital last May.
Growth capital from Vespa has helped FibroFind develop pre-clinical testing techniques for medicines designed to treat fibrotic diseases affecting the liver, kidneys and lungs, using a patented human tissue model that can predict how drugs will behave in the body. This enables them to assess whether compounds will succeed or fail in later-stage clinical trials, saving drug development companies huge amounts of time and capital. It’s indicative of the calibre of technology being developed at the North East’s universities – and their commercial potential.
“The fast-growing life sciences space highlights how academic innovation creates investable, high-growth businesses,” says Jim Whittaker, corporate finance partner at Grant Thornton, who advised FibroFind. Capital will seek out deals like this, he adds: “IP-rich North East businesses don’t just attract local interest, they attract capital nationally.”
Word spreads
Awareness amongst North East owner-managers of what private equity offers has been growing. There are visible success stories and the ecosystem of local advisers who understand private equity is expanding.
Buston & Maughan (B&M), a provider of building services to social housing providers across the North East, was sold to Foresight Group in the autumn of 2025. Abu Ali, a Newcastle-based corporate finance partner at FRP Corporate Finance, advised on the sale. He first met the company around six years ago and was called in when B&M received a trade offer 18 months ago.
Owner-managers don't have to sell to a buyer based outside the region. PE is an option
The team wanted some cash, but they also wanted to stay in control of the business and retain exposure to any future upside. FRP were engaged to lead a process that resulted in Foresight coming in as a minority backer, in a deal that proved a perfect fit for the management team’s objectives.
“We were able to secure a materially better valuation than the original trade offer and structured a deal where the founders retained a majority stake – it was an ideal outcome,” says FRP’s Ali. “Owner-managers in the North East don’t have to build a business, reach a ceiling and then sell to a bigger strategic buyer based out of the region. Private equity is an option. As more successful transactions complete, confidence builds and more owner-managers will see that there is a way to scale their companies locally with private equity backing.”
