48 NEWS
IN THIS ISSUE T
NEWS • DEALS • PROFILES • REVIEWS • STRATEGY
UK M&A grows with strong 2011 start; Attenda MBO backed by Darwin; K3 purchases FD Systems to expand Sage offering; 3i acquires stake in TouchTunes
51 A SIGN OF THINGS TO COME With technology being one of the fastest- growing sectors in the UK, we examine the deal drivers behind tech M&A
54 THE ‘RED-TAPE REVOLUTION’? With the Takeover Panel’s work on its new Code now complete, Hunter Ruthven examines the impact that the fresh requirements could have on M&A
56 RISKY BUSINESS With corporate M&A on the up, EMC Corporate Finance has closed transactions in excess of £100 million over the past 12 months
58 DEAL DIRECTORY The latest deals from across the UK
his month we are taking a detailed look at the UK’s technology sector (see page 51), and despite the lacklustre economic outlook and the enduring turmoil in the financial sector, our findings make for positive reading, with steady increases in the volume and value of deals indicating the underlying strength of this environment. Before technology, however, must come serious innovation, and British start-up has historically been strong in this regard and has continued to build on this over the past ten years.
In terms of tax breaks, there is an array of schemes in place to encourage and incentivise innovation – from EIS to regional funds and IHT plans. In terms of education, almost every UK university worth its salt now supports some form of professionalised “spin-out” incubation and acceleration unit for tech breakthroughs. In the finance sphere, there are a large number of cash-rich tech-dedicated VCTs, VC funds and other early-stage supporters.
And while the UK is not yet competing head-to-head with California as an equal, Old Street in London now boasts its “Silicon Roundabout” of digital media players, Bristol has its very own “Silicon Gorge” of innovative microchip firms, and Cambridge sports a cluster of tech talent at its “Silicon Fen”.
So far, so good. But there is still one structural issue in the technology sector that needs to be addressed by UK business and political leaders – how do we build global technology players? We are very good at coming up with inventions, we are getting better at backing ideas with seed capital, and we’ve shown an appetite for backing the loss-making early years of technology development. What we haven’t yet quite mastered is how to take innovative technology SMEs on to the world stage with any great regularity, which is where the real money is made.
Autonomy’s development from tech start-up to $10 billion global leader in information management is the exception that proves the rule. What’s needed now is greater risk-taking, financial courage and funding flexibility in the mid-market. Easier said than done, I know, but at least we know where the problem is.
mandadeals.co.uk
HUNTER RUTHVEN Journalist
Mergers & Acquisitions 47
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