DEALMAKERS
IN ASSOCIATION WITH:
OF UNCERTAINTY
As 2021 gets underway, the direction that UK plc is heading is far from clear. The pandemic continues to do its worst as the country adjusts to its new relationship with Europe.
However, M&A experts believe that despite all the uncertainty, the appetite for deals witnessed throughout the worst months of Covid-19 will remain strong – with some even predicting record activity in the months ahead.
Lancashire-based accountancy and business advisory firm MHA Moore and Smalley advised on corporate transactions and fundraising deals with a value of more than £200m in the 10 months to October 2020.
Andrew Feeke, its head of corporate finance, believes widely anticipated changes to the capital gains tax regime next year, together with strong liquidity among funders, could lead to a record volume of deals between January 1 and April 5.
He says: “We mustn’t forget that this has been a very challenging time for many people and
communities, as well as for businesses and their owners.
“At the same time, it’s also been encouraging to see many businesses are still growing, creating jobs, and attracting investment.”
Those tech firms
that are serving the healthcare sector are very sought after
The deals the firm advised on in 2020 included the management buy-out of Chorley based automotive parts specialist Bailcast for an undisclosed sum.
Andrew says: “Our deal activity has remained strong throughout the pandemic period with
our team kept busy on deals spanning different sectors, including cross border deals. Many of the legal advisors and private equity contacts I speak to are witnessing a recent increase in activity levels.
“Our short-term pipeline of deals remains incredibly strong and a key driver of this is the possible increase in capital gains tax rates, likely to be introduced from April next year.
“We’re looking at a lot of MBO activity and Employer Ownership Trust transactions as owners, particularly those with cash on the balance sheet, look to accelerate transactions to realise value from the business before any potential changes come in.”
It is thought chancellor Rishi Sunak could implement some changes to the tax rates in relation to individuals and small businesses as part of his next Budget.
Andrew says the uncertainty over capital gains tax after April will “probably weight the majority of next year’s deal activity in quarter one.”
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A GREAT DEAL
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