What a difference a year makes

Twelve months ago, in the midst of the COVID crisis and the first lock-down, we were triaging our corporate finance clients into those that needed acute assistance such as emergency funding, a minority where the original transaction and proposed timing remained viable but a majority where it was necessary to pause until the acquisition/investment proposition could be re-assessed and demonstrated in a (post) COVID environment.

Fast forward 12 months, we are yet again in lock-down but in the interim we have completed 44 deals with an aggregate value of £400m, including 11 deals with an aggregate value of £170m in March alone.  Whilst we are delighted at the quality and extent of our deal flow, this is not untypical and there has clearly been a very strong bounce-back with an M&A deal frenzy over the last six months. The last quarter in particular benefitted from unprecedented levels of liquidity in the debt and capital markets and many good COVID resilient businesses looking to conclude a transaction in advance of the threatened reform to capital gains tax.

There was a really strong sector theme to deal activity and our experience was consistent with the market generally with TMT (technology, media and telecoms) being the most active. Recent transactions we completed in this sector included the MBOs of Trust Systems, a network consultancy and managed service provider, Phoenix Datacom, a data and network security specialist and Envitia, a geospatial data and service provider. However, it should be stressed that generally there is a strong appetite, either from trade acquirers or institutional investors, to deploy capital into any COVID resilient sector particularly those businesses that are B2B and tech enabled with a high proportion of recurring and / or repeat revenues.

With CGT getting a reprieve in the recent budget, we are expecting deal activity to remain strong, and this is reflected in our pipeline with a number of exceptionally strong businesses coming to market that have future proofed themselves for a post pandemic world.

We would be delighted to have an exploratory conversation with any business owner looking at a partial or full realisation of a shareholding in the current environment where there is an abundance of available capital and attractive CGT rates (which may not be available beyond Autumn this year given the continued threat of CGT reform in the next budget).  Please do get in touch with us on 01491 579740 to talk to one of our experienced team members.

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