Benchmark International

A business confidence survey conducted by accountancy firm EY has shown that nearly two thirds of UK companies are planning M&A deals over the next 12 months, which is the highest level since 2010.

The prediction comes after a strong first quarter which saw UK M&A total £87bn, with a total of 681 deals undertaken.

But with the turbulent political landscape due to Brexit, what has sparked such confidence in the UK M&A market?

The EY survey displayed that a high number of respondents were confident in global growth, as 86% of UK respondents expected the global economy to improve. Despite the positive global outlook, only 68% of respondents expected the domestic economy to advance. Nevertheless, trends are still expected to be on the up in general.

There are a number of reasons why this could be the case, one of these being that the M&A market is strong. This, coupled with the fact that the UK is always in an enviable position from an M&A perspective, as it has a tradition of entrepreneurial drive with a history of inbound and outbound M&A activity, places the UK at an advantage in terms of its deal making.

Not just this, but there are also some short-term factors at play within the UK, and globally, which could be sparking the intentions of UK companies. Cheap debt is a positive in driving M&A activity, as well as the amount of dry powder available.

Other recent surveys have also shown a potentially buoyant market as one conducted by PwC showed that over 43% of asset and wealth management CEOs have said that they have M&A intentions. The reasons cited were to enter new markets, increase scale and offer a more diverse product range.

If thinking about selling, the culmination of the aforementioned factors highlight the benefits of doing so now – while the long-term factors supporting UK M&A will most likely always be in place, the short-term (cheap debt and amount of dry powder) will not always be so readily available, so the opportunities should be taken advantage of now.

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximising solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

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