In the third of our end-of-year round-ups, we pull together the big deals of 2025
Literal Labs
Newcastle AI startup Literal Labs secured £4.6m investment, just two years after being founded. The firm is an AI algorithm company cofounded by academics Prof Alex Yakovlev and Prof Rishad Shafik, based on their work in machine learning and computer systems design. It became the first Newcastle University spinout to secure investment from Northern Gritstone, a fund that has concentrated on university-linked businesses in the North West and Yorkshire. Investment also came from Mercuri, Sure Valley Ventures, Cambridge Future Tech SPV and several angel investors.
FES International
Offshore engineering firm FES (Flexible Engineered Solutions) International was snapped up in a £50m cash deal to become part of multi-national oil and gas industry supplier Hunting. Launched in Ashington more than 20 years ago by directors Rob Anderson and Ian Latimer, the firm became part of the London-based $1.5bn revenue group which operates from 11 countries.
FES started with a first year turnover of £143,000, before growing to establish relationships with super majors, independent oil and gas companies and international energy operators. It currently trades from a 35,000sqft facility and 6,000sqft test facility, employing 46 people across three key divisions.
Thompsons of Prudhoe
Historic Northumberland firm Thompsons of Prudhoe – a company known for its expertise in demolition – was sold to Yorkshire-based Ashcourt Group. The firm dates back to 1948 and had remained in the family of its founders William and Margaret Thompson until the deal. It began in the haulage business for mostly agricultural customers but has since expanded into demolition services, asbestos removal, quarrying, earthworks and contaminated land remediation.
Lloyds Bank
In May the North East mayoral authority announced plans to work with Lloyds and the Office for Investment to drive investment into the region following a landmark agreement struck at the UKREiiF investment conference. The North East is already a key hub for the UK’s energy transition and it was hoped that the £160m North East Investment Zone would encourage more companies in the energy sector to create jobs in the region. The investment zone is specifically supporting offshore and renewable energy, as well as electric vehicle and battery manufacturing.
Lloyds Banking Group, the Combined Authority and the Office for Investment (OFI) are finalising details of how the joint initiative will work.
Arriva acquires RTS
Sunderland transport group Arriva announced a deal for a Yorkshire firm which will see it broaden its offering in the rail sector. The firm, which runs public transport services around the UK and abroad, concluded the deal to acquire RTS Infrastructure, which provides rail depot servicing and infrastructure works such as platform upgrades and track alterations. The deal includes the lease of RTS’ depot near Leeds Station, as well as the company’s existing maintenance, design and build contracts. Arriva said the acquisition would significantly expand its train maintenance capability.
AESC investment
A recruitment drive got under way in May to fill hundreds of roles at the new AESC battery plant in Sunderland following a £1bn Government-led investment. The facility next to the Nissan plant is supplying batteries for Nissan’s electric vehicles, with projections suggesting up to 100,000 vehicles annually could be powered.
Around £350m in guarantees from the National Wealth Fund triggered an investment of £680m sourced from various banks, while the Government’s Automotive Transformation Fund pledged a further £150m grant to the venture.
New finance package for Inn Collection Group
Newcastle based pubs-with-rooms company Inn Collection Group will be accelerating expansion across the UK next year, having sealed a £125m finance package in October. The hospitality group already owns and operates 31 sites across the North and North Wales, including the Tynemouth Castle Inn and The Bamburgh Castle Inn, and now the company is poised to put its newest expansion strategy into action, with the support of the nine-figure funding package from HSBC UK.
The firm is using the funding to increase its portfolio through the acquisition of a number of leisure sites across the country, which it says will be announced soon, taking its footprint to more than 40 locations over the next five years.
L1 Capital buys Hadrian’s Tower
The tallest building in Newcastle was snapped up in the summer by Australian investment firm L1 Capital in a multimillion-pound deal. The building was listed for sale last year with a price tag of £14.6m, four years after opening its doors. The 27-storey residential tower has 159 flats, 57 of which remained unsold when the property was put up for sale.
It was developed by High Street Group, which went into administration in 2022 owing over £200m. Prior to its downfall, High Street Group had been one of the North East’s most high profile developers.
Ward Hadaway merger with Endeavour Partnership
Law firm Ward Hadaway completed a merger with Teesside company The Endeavour Partnership LLP in July to create a 600-strong business.
The law firm, which has offices in Newcastle, Leeds and Manchester, originally announced talks with the Thornaby commercial law company in February, amid moves to create “a stronger, more diverse business” for their clientele. The Endeavour Partnership LLP now operates under the Ward Hadaway name and identity, and all of the existing team still operates from offices on Teesdale Business Park. The firms’ managing partners highlighted how clients now benefit from legal expertise across a broader range of practice areas.
Aspire Technology Solutions investment
Aspire Technology Solutions, a former North East Company of the Year, secured investment to value it at around £200m. The firm is using the funding to support its growth. The company specialises in providing a range of IT services including cyber security, the cloud and communications, and it has seen significant growth in recent years.
Existing financial backer LDC, part of the Lloyds Banking Group, and new minority investor Federated Hermes, put in fresh funding as the company aims to reach annual revenues of more than £100m by 2030.
