HALF YEAR DEALS REVIEW

HALF YEAR DEALS REVIEW

As the picture develops for M&A deal activity for the first half of 2020, two of Wales leading Dealmakers from the GS Verde Group take a look at the deal analysis provided by M&A data specialists Mark to Market.

In this summary, Nigel Greenaway, Director of corporate law firm Greenaway Scott and CEO of the GS Verde Group, alongside Craig Blackmore, Director of M&A finance specialists Verde Corporate Finance (also part of the GS Verde Group) share their views on the analysis:

Nigel Greenaway: The M&A market at the start of 2020 started well enough. Indeed in the first quarter (January to March 2020), the number of announced transactions in the UK was higher than in the comparable quarter of 2019 with 176 more transactions announced in the first quarter of 2020 compared with the same period in 2019.

HALF YEAR DEALS REVIEW

Nigel Greenaway: The 22% increase in deal volume splitting across a broad range of sectors with consumer and support service transactions making up close to 50% of all deals done, some way ahead of IT service transactions at 17% and financial service transactions at 12%.

HALF YEAR DEALS REVIEW

Note: Late or unclassified deals mean exact figures may vary.

Nigel Greenaway: Interestingly the last month of the first quarter, March 2020 actually saw the highest number of deals completed of any month this year. I suspect a lot of pipeline deals made sure they cleared and closed before the full impact of Covid-19 really made its mark in the UK.

HALF YEAR DEALS REVIEW

Craig Blackmore: Drop in deal numbers from this time last year was expected as June 2019 was one of the most active months for deals last year. We could be at a reset point where deal numbers track 2019 levels - but hopefully we get there a bit quicker than that!

HALF YEAR DEALS REVIEW

Craig Blackmore: The 36% increase in June deal numbers was quite unexpected - the market clearly adapted quickly to the imposed ways of working. That should bode well for coming months as companies continue to accept the new normal.

Nigel Greenaway: The increase in June is a positive sign, and hopefully a trend that will continue to rise in the next few months. In fact, it is true to say that my personal experience has been that the pipeline for transactions has started to fill over the last 4 weeks or so and indeed July already looks capable of being a step up from June.

HALF YEAR DEALS REVIEW

Craig Blackmore: Multiples continue to increase with a 32% improvement reported for June as compared to April multiples. Increased understanding of market conditions and current impacts look like they have helped stabilise valuations.

HALF YEAR DEALS REVIEW

In summary: In conclusion, we can see a steady return in the market. A lot of commentators have already expressed an opinion that deal numbers will increase dramatically in the rest of 2020 and throughout 2021 and a lot of companies are indeed sitting on cash reserves, or are well placed with private equity or public market backing to take advantage of opportunities that arise in the near term future.

If you would like to get in touch with Nigel or Craig please click their name to email, or to discuss whether now might be the right time to plan a succession or an acquisition, please click here and one of our team will get back to you.

Source of data courtesy of Mark to Market.
Note: Late or unclassified deals mean exact figures may vary.