deals M&A deal market:


predictions for 2020 Ian Barton, a partner in Quantuma’s corporate finance team, provides a brief review of M&A deal activity in 2019 and looks ahead to 2020, providing his thoughts on what might happen


We have seen in 2019, a complex deal market, with three Brexit extensions and a softening of business confidence to the extent Q2 GDP slipped into negative territory. It’s undoubtedly the case that this has caused heightened caution from business owners committing to deal processes, but also in the banking markets which have noticeably tightened.


This uncertainty though has only had limited impact on the private equity (PE) market where investors have shown continued deal-doing appetite, though more as buyers than sellers in the past 12 months. As investors, PE have mitigated banking reticence by fully funding transactions with a view to re-banking in the near-term to get deals done.


While deals have been getting done by corporates too, they have been somewhat slow and when compared to this time last year, the volume and value of the deals completed have fallen considerably short. The total value of M&A deals in the UK has halved to £150 billion and in terms of the total number of deals completed thus far, we have seen a decline of 12%, which is a significant fall.


Although it’s easy to blame Brexit, it is notable that since 2016, sub-£30 million deals have remained steady quarter-by-quarter, but have shown a notable step-down since the summer as a combination of political and economic uncertainty has hit business confidence.


What has been encouraging is that we have continued to see deals getting done, despite these challenges, and we have seen a large number of new opportunities looking for advice to kick off processes in the New Year. As a result, looking ahead to 2020, we anticipate that there will be a number of deals coming to market; many of which have been held back over the past six months, and while the cautious approach will continue, there remains plenty of appetite in the market for good-quality businesses.


While 2019 has seen the mega-deals largely disappear, mid-market deal doing remained active as many entrepreneurs are driven more by lifestyle factors than macro-economics and Westminster politics. We predict that once business owners see uncertainty finally abate, and banking markets return to usual levels of credit availability, there will be a release of the pent- up deal activity and we will see owner managers with a renewed appetite for growth strategies, acquisitions and exits.


While the world of deal doing rarely runs smoothly, 2020 can scarcely throw up as many bumps along the road as 2019 did and presuming a year of more clarity as well as economic certainty, we expect to see activity levels return to historically comparable levels, if not a little greater as part of the catch up in demand.


Ian Barton 07881 816001


ian.barton@quantuma.com quantuma.com


28 businessmag.co.uk THE BUSINESS MAGAZINE – JANUARY/FEBRUARY 2020


business focus


of the month


of the mon of the


Business: keeping it in the family


writes George Style, partner, Haines Watts


Though it often goes unsaid, family businesses form part of the country’s backbone. But how resilient are they?


We have evidence which shows that family businesses are generally more likely to survive in tougher economic times and are able to retain their staff better.


Partly this is because family businesses tend to fund for the long term and often reinvest profits back into the


business. In many cases they are more cautious to rely on external debt and tend to hold higher cash balances. This means they’re in a financially more secure position when the going gets tough.


A long-term outlook helps family firms think beyond the day to day and consider what’s best for the business.


Getting succession right is one of the biggest challenges facing family businesses. There’s often a perception that the next generation doesn’t want to work in the family business – in our experience this isn’t the case. Many of the traits that we see in family businesses – having a strong culture, purpose and values – are increasingly important to millennials and generation Z.


To get it right, families need to plan ahead to make sure the next generation has the right skills and experience to take up the reigns. This might mean seeking experience outside of the business for a while to hone their expertise and bring new ideas. It may also mean using advisers to develop and execute the succession plan.


We’re having more and more conversations with entrepreneurs who are thinking, at an early stage, about how to build a family business and see it succeed across three generations.


Haines Watts supports many ambitious business owners with families throughout the local business community with first-rate business advisory and tax advice. Our wide range of services can help to strengthen your business and support you to accomplish your goals faster. Speak to our team of experts to help you work out how your business can achieve its goals faster in 2020.


See more at our website: hwca.com of th


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