Projections for M&A in the North East energy sector

The world is pushing for more sustainable energy and there's an urgent need for innovative solutions, as discussed in WBD's Global Energy Transition Survey Report. The North of England is stepping up to the plate and I have written a couple of articles recently on why the region is well placed to capitalise on the growth of the renewable energy sector. Known for its industrial heritage, the region is now leveraging its strengths to attract significant investment and spark some ground-breaking innovations in energy.

In the article below, I outline why the North East in particular is a region to watch and learn from, and why I expect to see a lot more M&A activity and Private Equity investment in the region's energy market in the next few years.

The bold innovations attracting attention

One of the things that makes the North East particularly interesting is the innovative nature of many of the businesses coming to the fore in the energy sector, providing potential solutions to the challenges that hinder the energy transition; whether it’s a home energy management app from Swarm Energy, a new battery energy storage system from Connected Energy or some of the innovative technology recently supported by the Technology, Innovation and Green Growth for Offshore Renewables' (TIGGOR) programme.

Large international business are also striving to scale their operations and boost their technological capabilities, and one of the ways they are doing this is through investments into and acquisitions of technology focused energy businesses in the region.

Many of our clients are at the forefront of this transformation. The firm has been advising key players such as Envision on its multi-million-pound car battery factory currently being built near the Nissan plant in Sunderland, and helping SeAH wind secure a deal to supply turbine foundations for the Hornsea 3 wind farm from their factory currently being built in Teesside.

The North East energy sector is seeing an unprecedented wave of both domestic and international investments in local energy businesses. Last year I worked on an exciting deal which saw the acquisition of Stockton-based energy data company EnAppSys by Norwegian headquartered Montel, backed by the Riverside Group (a global private equity investor). EnAppSys helps traders, energy analysts and other stakeholders to make the best strategic decisions based on data from 32 European countries and is another great example of a North East business delivering solutions in the energy sector to businesses across the globe.

A pool of talent to tap into

Thanks to the North East's rich industrial legacy, the region is stacked with expertise directly relevant and applicable to the energy sector. A masterclass in “transferable skills” is already underway in the region, taking traditional manufacturing techniques and applying them to cutting-edge renewable energy technologies – what many are referring to as going from ‘steam to green’.

This wealth of expertise has helped draw companies and investors to the region in search of skilled talent and out-of-the-box solutions. The availability of a highly skilled workforce, coupled with the region's commitment to education and training in energy-related disciplines, is opening up opportunities in the North East.

The universities of Teesside, Newcastle, Durham, Sunderland, and Northumbria are all within easy reach of each other, creating a collaborative powerhouse of educational institutions that add even more innovation to draw upon. For companies looking to expand their operations or enter new market segments - the North East has a lot to offer.

Steering the conversation by speaking with one voice

Recent years have seen the North East collaborate more across the region after the recognition that one strong voice can be more powerful than its individual parts. This pooling of resources across the region will be strengthened further when a mayor is chosen for the new North East Mayoral Combined Authority later this spring.

The appetite for collaboration between businesses and academic institutions creates fertile ground for innovation and growth. At Womble Bond Dickinson, our long history in the region, coupled with our specialist knowledge and extensive network of potential investors means we are well positioned to shepherd through some rewarding deals in the energy sector.

What’s more, we now have a framework in place which makes this ‘sky’s the limit’ thinking possible, with the regulations brought about by the Energy Act 2023. This is a topic my colleague Eleni Diamantopoulou offers more insight into in her article Energy Act 2023: The countdown to net zero.

I can definitely see more M&A and PE deals in the space in the near future, which will allow exciting energy start-ups to reach the next level, grow, and have an international impact.

At Womble Bond Dickinson, we are committed to supporting and guiding companies through their growth journey and are proud to be championing the role the region is playing in the global energy transition.