Deals Activity: Moderate
Restructuring Activity: High
Q1 of 2023 saw 17 deals within the Automotive sector. This reflects an 89% increase when compared to the previous quarter where there were only 9 deals noted and is much higher than the recent average of 14 deals. Key deals in Q1 2023 include:
- McLaren Group’s expansion through receipt of £70m development capital
- Lithia Motors acquisition of Jardine Motors Group for £300m
- Lloyds Banking Group’s leveraged buyout of TuskerDirect Limited, a market-leading UK-based vehicle management and leasing company, for £300m
Deals activity in this sector are dominated by the paradigm industry shift to electric vehicles (EVs). Increased appetite for the shift towards EV’s will have a positive impact on deals. Government legislation will also play a part by bringing in changes in emission laws, as well as automotive companies looking to develop a more resilient supply chain.
Restructuring activity in the sector has remained high or very high for several years. Supply chain issues, particularly in relation to semi-conductor chip shortages, have resulted in increased production costs. In addition, the wider economic outlook and rapid technological shift are encouraging potential buyers to delay purchases of new vehicles until the technological and regulatory landscape becomes clearer.
Deals activity in Automotive
Restructuring activity in Automotive
Working for an OEM client, we ensured continuity of supply with a distressed powertrain supplier. After a period of several months assessing options, we developed an innovative solution whereby the OEMs involved would back-stop a sale transaction, continuing to fund the business through the transaction and commercially supporting the purchaser.
Working with a large car retailer, we helped prepare for a site rationalisation programme by analysing underlying and potential performance and alternate use values. We also assessed the ability to reduce central costs and overheads in line with the proposed reduction in dealer sites and other cost reduction and process efficiency initiatives.
Find Your Expert
Kenny McKay is Head of Industrials Cluster, which includes Automotive as one of three core segments. Lee Swinerd leads our approach to the Automotive sector nationally. For a full list of our senior people with experience in this sector use the button below.Our senior team