What does the UK Technology Mid Market look like?

What does the UK Technology Mid Market Look Like?

I have been working in the UK Technology Sector since 1998 and have spent hours and hours analysing the sector.  While my research is far from complete, I have identified over 1,300+ companies in the UK mid-market, which I define as companies with revenues of £5m to £100m.  This is fertile ground for Private Equity companies as well as Corporates seeking to make acquisitions in the UK market.

I thought it would be interesting to share a little of my research results to give you and idea of what the UK Mid-Market sector looks like.  (Please note: The data in this piece of analysis has been sourced from Companies House returns which only cover England and Wales.)

Many of my clients have sought acquisitions based on very limited criteria including revenues and geography and I will use these two variables to illustrate the composition of  the market.

Turnover

The stratification of these business by turnover tells an interesting story;

  • £5m-£10m – 453 companies (34.6%)
  • £10m-£15m – 263 companies (20.1%)
  • £15m-£20m – 152 companies (11.6%)
  • £20m-£30m – 186 companies (14.2%)
  • £30m-£40m – 81 companies (6.2%)
  • £40m-£50m – 54 companies (4.1%)
  • £50m-£100m – 119 companies (9.1%)

Notice, that 80% of the companies have £30m revenues or less.  The distribution of these companies by revenues is shown in the graph below.

 

Graph showing the distribution of UK Mid Market Technology companies by revenues

Geographical Distribution

When addressing a market, the geographical location of a company is a key factor in evaluating its suitability to whatever strategic purpose is being considered.  I have always found it helpful therefore to be able to analyse the geographical location of company data sets.

In the image below you can see the geographical distribution of the 1300+ companies in the data set.

Map of the UK Mid Market Technology Companies

In the image below, I have drilled down to examine the companies which are in the South East of England, showing how more detailed analysis can be achieved.

South East England UK Mid Market Technology Companies

 

 

 

What next?

This work leaves many questions unanswered. Here are a few…

  • What sectors and subsectors are they working in?
  • What strategies are these companies adopting?
  • How profitable are they?
  • What does their 5 year track record looks like?
  • Who owns these companies?
  • Are they independent?  Subsidiaries of international companies? Part owned by Private Equity firms?
  • Are they acquisitive?
  • Are they struggling, surviving or soaring in this market?
  • Are they in need of external capital?
  • Are the owners/directors looking to sell their businesses and retire?
There is still much work to do.  
If you are interested in raising capital or doing M&A deals in the UK Technology Mid-Market sector, why not give me a call or drop me an email to discuss your strategic objectives.  You can reach me at jbdcolley[at]aol[dot]com.  
Thank you for joining the Conversation.

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