30 corporate finance
Baby boomers set to boost activity?
Business owners, particularly those born in the post-war baby-boom years, may now be ready to sell and help prompt increased activity in the corporate finance sector, writes John Burbedge
With many baby-boomers considering their retirement options, wealth reinvestment and even business exit plans may well become an increasing feature of the market, says RSM Tenon partner Rebecca Guerin.
The 2008 recession shelved the retirement plans of many. “Now, they have ridden out that downturn but, with the economic future looking fairly flat, they appear to be saying: We’ve waited long enough.” said Guerin.
Enquiries from retirement-focused baby- boomers have increased for the RSM corporate finance team, based in Reading, London and Southampton, but that isn’t the only area of encouraging activity.
Locally, the software and IT services sectors are flourishing, with noticeable consolidation and PE interest. Modern website technology is improving many companies’ marketing.
Waste and renewable energy continues to develop strongly; skills training and financial services (insurance broking and credit management) are equally faring well.
Retail is still challenging, said Guerin, although there are opportunities in niche markets.
“Construction is said to take you into recession and out of it as well. The housebuilders seem to be gearing up again,” Guerin added.
“It is very easy to say that the economy is bumping along the bottom, but from our perspective, it’s actually doing much better than that."
The total volume of UK mergers, acquisitions, flotations, rights issues and placements was up by 3.4% in the first nine months of 2012 compared to 2011. Also, the number of bank debt-funded deals has increased in the UK overall.
RSM Tenon’s own online ‘Tracker’ survey provided encouraging signs that the UK economy is steadying, reporting that insolvencies are declining and are currently at their lowest level for several years (although many ‘zombie businesses’ may still be fighting battles to survive).
“Deals happen when there is a common certainty, and deals are happening now because everyone is pretty certain that things are not going to be great for the next two years,” Guerin observed. “Those deals tend to be driven by cash-rich corporates or involve private equity houses looking to invest in quality.
“Last summer’s eurozone troubles fractured the fragile confidence returning to markets. Now a
www.businessmag.co.uk
year on, boosted by Britain’s summer of success, we can see that confidence coming back, but 2013 will remain a cautious time for investment.
“There is no obvious catalyst to ramp things up. It will be slow progress,” Guerin predicted.
While overall volumes and values of deals have been hit by lack of post-recessionary funding and confidence, there are economic recovery signs – not least in the financial intermediary sector.
In its October Business Monthly Report, global research company Experian CorpFin reported the sector as the UK’s most active in September. Mid-market activity, RSM Tenon’s client heartland, was up by 2.8% after a four-month consecutive downturn.
RSM Tenon’s own growing professional workbook reflects this activity. This year the corporate finance team has advised on several prestigious deals, including corporate finance partner Steve Brown’s involvement with the sale of toy retailer Hamleys to Groupe Ludendo for £60 million.
RSM Tenon is progressing too. It has soared up the Experian CorpFin’s M&A Activity YTD 2012, Advisor League Tables from 20th place to achieve the number two position for UK M&A volume.
Peter Vandervelde, RSM Tenon’s national head of corporate finance, commented: “While delighted to be recognised as a front-running adviser, we are never complacent. We know our position relies upon us delivering excellent advice and quality work for clients, whether they are start- ups, SMEs or growing mid-corporates.”
Funding is not always a problem says Vandervelde. “There is plenty of money out there for quality propositions and sensibly geared deals.
“Small and medium-size PE houses are putting up cash, often pure development growth capital, both here and overseas, although we are not seeing many £25m-plus PE deals at the moment,” said Vandervelde.
RSM Tenon has noted a trend for US private equity to use the UK as a financial hub and professional advisory base for investment into Europe, particularly focused on Scandinavia.
Despite scepticism when created, the UK Business Growth Fund supported by five high street banks was working well to help SMEs, Vandervelde agreed.
“You have to take your hat off to them. They’ve done approaching 20 deals this year; no other
THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER 12/JANUARY 13 Peter Vandervelde
PE house has done that.” (The first BGF deal was with Southampton-based Benefex, with due diligence performed by RSM Tenon).
The Government supported £2.4 billion Regional Growth Fund was also beginning to make a difference, with its opportunities for grants and loans for business projects creating sustainable growth and employment.
“I think it is down to the adviser community to make people fully aware of these funds as well as more conventional routes.”
Details:
www.rsmtenon.com RSM Tenon offices:
Reading – 0118-9530350 Basingstoke – 01256-312312 Marlow – 01628-478100 Southampton – 023-8064-6464
Rebecca Guerin
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60