The UK M&A market has remained remarkably resilient over the last 18 months, despite turmoil in the public markets in Q4 2018. Strong valuations, an increase in mega-deal activity and generally flat transaction volumes have seen the value of completed deals hitting near record levels.
There were 7,539 deals announced during 2018, representing an upturn of 2.3% on those carried out in 2017 and a full 25% over the ten-year average since 2009. This represents the highest number of annual transactions on Experian’s record and a significant return given the uncertain operating climate.
While the initial public offering (IPO) market has been slower to reawaken, notwithstanding strong Q1 2019 market performance, Brexit uncertainty has to a large extent been priced in by M&A dealmakers.
There are three main trends driving robustness in M&A activity. Firstly, there is a wall of liquidity in the market driven by private equity and attractive debt markets. Secondly, shareholder activism is the new normal, putting corporates firmly in the spotlight on shareholder value creation, which is driving both non-core disposals and strategic acquisitions. Thirdly, in spite of the uncertain political climate, UK businesses remain at the forefront of innovation and are highly attractive targets for overseas corporates, supported by the weakness in Sterling.
The UK remains a great place to do business
We advised on more than 200 deals in 2018 worth £9.5 billion. Our sector expertise, mid market focus and international reach, combined with a genuinely integrated approach across all aspects of the deal, is resonating in the market.
We are always keen to work with dynamic, growing businesses. If you are contemplating your strategic options for 2019 and beyond, we would be delighted to discuss this with you and share our thoughts. Please contact Andy Morgan for further information.