2018 – a business sale boom?
Interesting news coming out of the City this week. Despite widespread uncertainty, British firms are planning an M&A buying spree in 2018, at a level not seen for a decade.
City AM quotes a survey by EY, and reports that 60% of companies are planning to make an acquisition in 2018 – a figure that has risen 9% since April. It’s good news, and suggests the UK is set to retain its position as the world’s third most active M&A market, with a global reputation as a great place to do business.
BCMS believes the signs have been here for a while, and this news echoes much of our own positive post-Brexit commentary over the past 18 months. Our own statistical analysis reveals that overseas interest in UK clients has actually increased post referendum, with ~30% of all UK clients now selling to an overseas acquirer. At BCMS, we have also seen a 20% upswing in interest from UK acquirers in 2017. It’s clear there is strong buyer appetite for the right businesses, as our 2017 success gallery demonstrates.
The weaker sterling helps overseas acquirers, of course, but strategic growth is still the main driver for buyers here and abroad. The stories behind the stats are fascinating: some overseas companies have made their first acquisition after Brexit. Another BCMS deal saw a European engineering group move into a completely new sector – healthcare – and its very first out-of-sector acquisition was a UK company.
Anyone who has attended a BCMS Masterclass will know I am keen to stress the value of looking beyond the obvious, and out of sector when pursuing a company sale. This is more important now than ever. Some markets are experiencing consolidation – bigger fish buying smaller players. But many of the really big acquirers cannot buy in their core sector due to regulatory competition concerns. You probably know that the Tesco/Booker deal is causing big ripples, and may be blocked. Does that mean acquirers are thinking more laterally than ever before? Our current pipeline of deals suggests creative, tailored deal-making is a major theme, with different buyer types actively looking for a wider range of target businesses.
So if you want to take the plunge this year or next and sell up, make sure that you look cross-sector, and cross-border – and get advice from someone who knows the wider M&A market inside out.
Dave Rebbettes presents the BCMS Masterclass programme – full details on upcoming events are available on the BCMS events page