2026 is proving to be a significant year for M&A activity, with a notable shift in the conversations taking place between business owners, investors and acquirers with regard to strategy.

Aligned to this there has been a 12% rise in the aggregate value of UK M&A activity to £131bn (source: PWC), with a strong appetite for high-quality UK businesses across many sectors, from Private Equity houses, trade/strategic buyers and financial investors still actively looking for opportunities.

Significantly, the average deal size increased by 28 percent, with interest rates and reducing inflation adding further impetus to buyside intent and activity. As a result, many informed business owners are beginning to prepare and position themselves, well ahead of any formal sale process.

What buyers are seeking

According to commentators ‘quality businesses’ are in high demand and attracting serious acquisition interest (source: PWC). Below we assess some of the key criteria credible proactive buyers are currently seeking:

1. Recurring/Predictable Revenue

Businesses with strong levels of recurring or repeat revenue continue to attract significant interest.

Buyers place considerable value on visibility and predictability of earnings, particularly in uncertain economic conditions. Long-term contracts, retained clients, subscription models and recurring service revenues can all contribute positively to valuation and deal confidence.

2. Strong/capable Second Tier Management

Businesses where knowledge, relationships and operational control sit too heavily with the owners can indicate significant risk in the mind of the acquirer. Often companies with heavy owner-reliance see potentially reduced deal values/sale prices.

In contrast, companies with capable second-tier management teams, delegated responsibilities and operational maturity are often viewed as highly attractive, commanding higher deal values.

This does not mean founders need to step away from their business before considering a sale. However, demonstrating that the business can continue to perform and grow beyond the founder is increasingly important.

3. Clean Financial Reporting and Visibility

As the old adage goes, Turnover is vanity, Profit is sanity, Cash is king! Yet cash generative businesses with poor financial controls and reporting frequently encounter difficulties when attempting a sale.

Decent internal systems and accurate financial reporting is one of the clearest indicators of a well-managed business. Businesses with strong reporting disciplines often progress through due diligence more efficiently and with fewer challenges later in the process.

4. Strong/Growing Market Sector

Market sectors offering strong growth and good earnings potential naturally attract investment and higher levels of M&A activity. Commentators are highlighting TMT, financial services, energy infrastructure, and healthcare as key active sectors in 2026 (source: PWC).

As a sector agnostic advisor, the EvolutionCBS deal team continues to see strong interest in a wide range of sectors, including fire safety, consultancy, B2B product supply, engineering and specialised manufacturing.

Crucially, companies with a defensible sustainable growth potential, market position, strong client relationships, and technical expertise/differentiated capabilities in these sectors.

Preparation is key

For business owners considering a sale preparedness is essential. One of the biggest misconceptions around business sales is that preparation only becomes relevant once an owner has decided to sell.

In reality, the opposite is often true. The businesses that achieve the strongest outcomes are frequently those that have spent time preparing well in advance: strengthening management structures, focused on growth and cash generation, reducing risk and understanding how buyers may view the business.

Being well prepared will not only creates options for owners, but allows shareholders to make decisions from a position of strength rather than pressure.

Thinking about selling in the next few years?

Join our exclusive masterclass, **Pole Position: Preparing Your Business for Sale**, and discover what buyers are really looking for, how to maximise value, and the steps you can take now to improve your outcome when the time comes.

Learn more and book your place HERE

At EvolutionCBS, we work closely with owner-managed businesses to help them understand how the market may view their business today, where value can potentially be strengthened, and how future strategic options may evolve over time.

Whether a shareholder is considering a sale in the short term or simply beginning to think more strategically about the future, early preparation can have a significant impact on long-term outcomes.

To discuss valuation, readiness or future strategic planning in confidence, please contact us.

In reality, it marks the beginning of one of the most important phases of the transaction.

The period between agreeing heads of terms and completing a deal is where the detail behind the deal is fully explored — assumptions are validated, risks are identified, and both parties build the confidence required to complete. While much of this work happens behind the scenes, it plays a decisive role in determining whether a transaction completes smoothly and on agreed terms.

Due diligence is where value is confirmed — and tested

Following an agreed offer, the buyer will undertake a detailed due diligence process.

This goes beyond simple verification. It is a comprehensive review of the business across financial, commercial, operational, and legal areas — giving the buyer a far deeper understanding of how the business performs in practice.

When a business is well-prepared, this stage typically runs in a structured and efficient way, reinforcing the value already agreed.

Where preparation is less robust, however, issues can surface at a point where leverage has shifted — which can lead to increased scrutiny and, in some cases, pressure on value or deal terms.

Managing the process, not just the transaction

This stage brings together multiple parties — legal advisers, financial advisers, management teams, and the buyer’s due diligence providers — all working towards completion.

Information requests become more detailed, timelines can come under pressure, and momentum can be lost if the process is not actively managed.

Our role during this phase is to lead and coordinate the process end-to-end — managing information flow, driving momentum, aligning all parties, and ensuring that the deal agreed at heads of terms is the deal that is delivered at completion.

Maintaining value through clarity and control

As buyers gain deeper insight into the business, it’s common for elements of the deal to be revisited — whether in relation to pricing, structure, or contractual terms.

This is a natural part of the process. Greater visibility allows both sides to refine the agreement with greater certainty.

Where a business has been well-positioned from the outset, and potential issues have been identified early, these discussions tend to be constructive and well-controlled.

Where this is not the case, there is a greater risk of value erosion as the process progresses or even deal collapse — which is why preparation and active management are critical.

Completion is the result of a well-managed process

Completion is not simply a final step — it is the outcome of maintaining momentum, managing detail, resolving issues and keeping all parties aligned as the process evolves.

By taking a hands-on role throughout, we ensure the process remains controlled, focused, and progressing towards a successful outcome.

Preparation makes the difference

As with every stage of a transaction, what happens between offer and completion is heavily influenced by the level of preparation beforehand.

A well-prepared business, supported by a structured and proactively managed process, is far more likely to move efficiently through due diligence and complete on agreed terms.

For many owners, this stage provides both clarity and challenge — testing the detail behind the deal while ultimately strengthening it.

In our experience, the better prepared a business is for this phase, the more controlled, constructive, and successful the journey to completion becomes.

Thinking about selling in the next few years?

Join our exclusive masterclass, **Pole Position: Preparing Your Business for Sale**, and discover what buyers are really looking for, how to maximise value, and the steps you can take now to improve your outcome when the time comes.

Learn more and book your place HERE

At EvolutionCBS, we work closely with owner-managed businesses to help them understand how the market may view their business today, where value can potentially be strengthened, and how future strategic options may evolve over time.

Whether a shareholder is considering a sale in the short term or simply beginning to think more strategically about the future, early preparation can have a significant impact on long-term outcomes.

To discuss valuation, readiness or future strategic planning in confidence, please contact us.

What is less often considered, but equally important, is whether the advisory team leading that process has the depth of experience required to position the business effectively in front of the right buyers.

This is particularly relevant in sectors such as Technology, Media and Telecommunications (TMT), where value is not always immediately visible on the surface, and where buyer expectations are shaped by a combination of commercial, technical, and strategic factors.

Against this backdrop, EvolutionCBS is pleased to welcome Dolf Campman and Pradip Somaia, Partners at our sister company Regent Evolution, to the team further strengthening our capability in these areas.

Experience that reflects how buyers assess value

Both Pradip and Dolf bring extensive experience advising on complex corporate transactions, with a particular focus on TMT and technology-enabled businesses.

Pradip Somaia, a Fellow of the Chartered Institute of Management Accountants and Chartered Global Management Accountant, brings more than two decades of corporate finance and M&A advisory experience. His transaction track record includes advising on a number of notable deals, including the sale of BTCSoftware to HG Capital-backed Bright Group and InfoFlex to Civica. Over the course of his career, he has led more than eighty advisory assignments spanning acquisitions, divestments, business sales, funding rounds, valuations, and strategic consulting.

Pradip Somaia, a Fellow of the Chartered Institute of Management Accountants and Chartered Global Management Accountant, brings more than two decades of corporate finance and M&A advisory experience.

His transaction track record includes advising on a number of notable deals, including the sale of BTCSoftware to HG Capital-backed Bright Group and InfoFlex to Civica. Over the course of his career, he has led more than eighty advisory assignments spanning acquisitions, divestments, business sales, funding rounds, valuations, and strategic consulting.

Dolf Campman is a senior investment banking professional with significant international experience across the TMT sector. His work spans B2B software, telecommunications, broadcasting and publishing, providing him with a broad perspective on how businesses are evaluated by both strategic acquirers and financial investors. He is particularly experienced in cross-border transactions and in supporting entrepreneurial and private equity-backed businesses through buy-and-build strategies — enabling him to identify where value can be created, and how it can be clearly articulated within a sale process.

Together, their experience reflects a deep understanding of how buyers assess risk, structure transactions, and ultimately determine value.

Strengthening capability, not increasing volume

These appointments are not about increasing the number of clients we work with. They are about strengthening the level of expertise we bring to each engagement.

At EvolutionCBS, we continue to work with a small number of clients at any one time, allowing us to provide a Low Volume Premium Guided Service built around senior leadership and sustained involvement throughout the process.

By adding further depth of experience within the TMT sector, we are better positioned to support clients operating in these sectors — particularly where transactions involve technical complexity, international considerations, or evolving buyer expectations.

Building each process around the individual business

While sector expertise is valuable, our approach remains focused on understanding each business on its own terms.

Our role is to identify specific drivers of value within each opportunity, ensure that they are clearly presented, and manage the process in a way that protects and enhances that value throughout.

This requires detailed preparation, careful positioning, and a level of involvement that extends well beyond simply bringing a business to market.

EvolutionCBS Managing Director, Mike Whittle, commented: ‘We are delighted to formally welcome Dolf and Pradip to the EvolutionCBS team. Over the past 16 years, we have remained committed to our core values of quality, integrity, and passion, underpinned by the depth of experience our team brings to every transaction. I am confident that Dolf and Pradip share this mindset and will be a valuable addition for both our colleagues and our clients.”

Thinking about selling in the next few years?

Join our exclusive masterclass, **Pole Position: Preparing Your Business for Sale**, and discover what buyers are really looking for, how to maximise value, and the steps you can take now to improve your outcome when the time comes.

Learn more and book your place HERE

At EvolutionCBS, we work closely with owner-managed businesses to help them understand how the market may view their business today, where value can potentially be strengthened, and how future strategic options may evolve over time.

Whether a shareholder is considering a sale in the short term or simply beginning to think more strategically about the future, early preparation can have a significant impact on long-term outcomes.

To discuss valuation, readiness or future strategic planning in confidence, please contact us.

Typically, a buyer will submit over 650 questions during this phase — spanning financials, contracts, compliance, HR, IT, tax, legal and commercial risks, and beyond. Often it is at this stage where deals can collapse completely, usually due to sellers not having the right strategy and support, causing delays and likely impacting value.

At EvolutionCBS, we’ve successfully managed 360+ transactions worth more than £2bn, and we know that how you handle due diligence can be the difference between a deal that succeeds — and one that doesn’t.

Here’s how we make sure our clients don’t just survive due diligence. They achieve the kind of successful completion they hoped for at the outset.

1. Prepare EarlyThe most successful due diligence processes start long before any buyer shows interest. At EvolutionCBS, we encourage our clients to get ahead by preparing early — ensuring their financial information, forecasts, and performance data are clear, consistent, and ready to stand up to scrutiny.

This early groundwork means that:

• Financial records are accurate and presented in a buyer-friendly format
• Forecasts and business plans are refined to address likely buyer questions
• Potential issues are identified early, reducing stress and delays later on

By preparing well in advance, our clients approach due diligence with confidence — ready to demonstrate the strength and potential of their business from day one.

2. Managing 650+ Buyer Questions — With Precision

Due diligence can feel overwhelming. Buyers typically request hundreds of data points and supporting documents, often revisiting topics multiple times. Our role is to project manage the entire process — so you don’t have to.

Here’s how we do it:

✅ Every question is logged, tracked, and responded to promptly
✅ All communication flows through your dedicated Client Director
✅ Progress is monitored daily and shared through a “Due Diligence Tracker”
✅ Weekly calls — often daily updates — ensure total visibility and control

This structured, meticulous approach is a major reason we maintain a success rate approaching 80% on all projects we take to market.

3. Maintain Momentum and Negotiating Power

Deals often lose value when due diligence drags on. Slow responses, inconsistent messaging, or disorganised disclosures give buyers the upper hand — or worse, cause them to walk away.

Our “Low Volume, Premium Guided Service” means we only work on a limited number of projects at a time, dedicating around 1,500 hours per client. This level of focus keeps momentum strong, reduces deal fatigue, and ensures you maintain control right up to completion.

4. Managing Private Equity Due Diligence — A Specialist Skill

Over the last three years, 66% of our deals have involved private equity investment — and half of those included a partial fundraise or equity rollover for our clients.

Why does this matter? PE buyers are among the most thorough and demanding when it comes to due diligence. They scrutinise everything — from historical performance to governance frameworks — before committing capital.

Our experience managing hundreds of PE-backed transactions means we know exactly how these buyers think, what they expect, and how to present your business in the best possible light.

5. Protecting Value Through to CompletionProtecting value isn’t just about getting through due diligence — it’s about how the entire sale process is managed from start to finish. Every stage, from initial preparation to final negotiations, plays a part in preserving the strength of your valuation and ensuring a smooth path to completion.

Throughout the process, we help our clients to:

• Maintain competitive tension during the early stages of buyer engagement
• Reduce the risk of price renegotiation through thorough preparation and clear communication
• Strengthen completion certainty by managing expectations and timelines effectively
• Position themselves for a seamless post-sale transition

By staying proactive and in control at every step, our clients maximise both confidence and value — right through to completion.

Why EvolutionCBS?

With over 2,800 active relationships across financial investors, private equity firms, trade acquirers, and advisory networks — and a track record of delivering an average 80% success rate, through our meticulous uncompromising approach — EvolutionCBS is uniquely equipped to guide you through the most demanding stage of the sale process, through its low volume, premium guided service.

Due diligence is where deals are won or lost. With the right preparation, structure, and expert guidance, it becomes an opportunity to build confidence, increase value, and secure the best possible outcome.

fraser.hodgkiss@evolutioncbs.co.uk
Get In Touch
www.evolutioncbs.co.uk
07957 834506
0118 959 8224

*******************************************

If you would like a no-obligation consultation on the sale of your business or would like to discuss our Business Valuation Service, click here.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides them with pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment.

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment, we boast a market leading success rate with 14 year average above 75%.

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

Of the many measures under consideration, which have included the abolishment of the ‘non-dom’ status and significant changes to the Inheritance Tax regime, changes to the Capital Gains Tax rules are rumoured to be substantive and are causing the most concern for vendors and prompting deal makers to look again at projects in flight.

If anything, what is clear is that the landscape for dealmaking is evolving rapidly, as macro-economic and socio-political factors continue to collide. As previously reported Q2 2024 saw a strong run of Private Equity deals signalling a rebound against a backdrop of sustained high interest rates, however, any significant changes in the tax/regulatory environment will likely produce further turbulence for dealmakers.

For vendors considering a sale, a substantive change in the Capital Gains Tax regime may well trigger thoughts on the timing of any business exit. Whether due to retirement or strategic growth, any owners contemplating a sale should speak to an experienced M&A advisor/consultant without delay, along with an experienced/qualified tax advisor.

For acquirers, it is highly likely that rumours surrounding October’s impending Labour budget will have lit a fire under any strategic plans for Q4 2024. On a positive note, Britain remains a hive of M&A activity and an attractive investment destination (based on Foreign Direct Investment inflows), and whatever the outcome of the budget the presence of keen acquirers is likely to remain a feature as we close out the year.

Most M&A advisors, consultants and brokers will likely await the Autumn budget measures in a reflective mood. The market has been turbulent, seeing both positive appetite for acquisitions, and corporate and financial acquirers negotiating hard on transactions. Only time will tell if the Chancellor’s measures prove to be Christmas come early for M&A in Britain.

****************

If you would like to sell a business before the 5th April 2025 then please contact us about our Accelerated M&A Service, designed specifically to complete a transaction by the end of March 2025.

If you would like a no-obligation consultation on the sale of your business or would like to discuss our Business Valuation Service, click here.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides them with pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment.

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment.

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

Commentators point to interest rate stabilisation as one contributing factor, providing a boon for deal makers, the impact of which, is increasing valuations. In fact, valuations are rising not only due to increased interest rate clarity, but also the levels of “dry-powder”/cash reserves and existing leverage capacity within the economy as a result of slower M&A activity during 2023.

Additionally, analysts have pointed to a strong run of Private Equity deals in Q2, with PE deals accounting for 41% of deal value, a material increase compared with Q1 (34%), and a positive signal that stabilised interest rates have bolstered the confidence of the investment community/financial acquirers.

Corporate acquisitions and strategic deals featured across a range of sectors. A review of British M&A transactions since the start of the year indicates significant volumes of dealmaking in multiple sectors, including Technology, Software, Food, Engineering, Manufacturing, and other related sectors.

Crucially, according to a Senior Manager for Deals Intelligence at LSEG “M&A involving a UK target has more than doubled and now accounts for the highest share of global M&A in three years…”¹

Interestingly, transactions involving B2B and IT sector companies accounted for the largest share of global M&A deal value (24% and 21% respectively). The Deal Team at EvolutionCBS is currently working on transactions in a number of these key sectors on behalf of our clients.²

This increased activity points to what some commentators have described as a major shift in risk appetite over the first half of the year, with far less pressure on deal valuations compared with Mid-Market multibillion-dollar deals.

Crucially Britain remains a hive of M&A activity and an attractive investment destination, with a recent survey of investors suggesting that 69% of respondents are keen to invest in the UK, which is second only to France in attracting Foreign Direct Investment inflows into Western Europe.³ American acquirers are an enduring feature, accounting for 26.7% of all M&A value in Europe.⁴

For dealmakers, shareholders and company directors considering the timing of a sale these indicators should be a welcome sign of things to come in H2 2024, both in terms of demand for acquisitions and the ability of both corporate and financial acquirers to complete on significant transactions.

References:

1. LSEG Data and Analytics “Exploring deal making – an H1 deep-dive”.
2. Pitchbook Global M&A Report Q2 2024.
3. EY Global Economic outlook: thriving in a new normal.
4. Pitchbook Global M&A Report Q2 2024.

****************

If you would like a no-obligation consultation on the sale of your business or would like to discuss our Business Valuation Service, click here.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides them with pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment.

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment.

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

However, there is a qualification needed here. There has been a marked drop in the number of IPO’s and ‘mega deals’ and, sadly, an increase in the number of business failures – of both large and small companies.

The middle and lower-middle market has however been much more stable. Businesses in this sector of the market usually have less debt and offer greater potential to scale. This makes them an attractive proposition for trade and financial buyers alike as they pursue their strategic growth agendas.

After the massive post-Pandemic boost to dealmaking in 2021, the market began to settle in 2022 before being subdued by inflation, war, and general uncertainty – all factors that quickly impact deal making.

It’s important to remember however that these are global factors, and we see no decline in interest from international buyers. The UK has always been a key target country for global acquirers. This year it is the USA/Canada that has led the field moving Europe to third place.

M&A is a driver of economic activity and there is still an enormous amount of cash around looking for a home – despite rising interest rates. An article by PWC noted recently “Whether a company needs to transform its capabilities, supply chains or its ‘go to market’ approach, the market is impatient and one of the fastest ways to accelerate transformation is through M&A.”

The M&A market is also cyclical and reacts to uncertainty, putting pressure on deal volumes and valuations. This means that advisers may be more cautious in their valuations, and business owners should be prepared for a longer sale process as the due diligence part of a transaction is taking longer.

Opportunities for buyers and sellers

M&A provides companies with opportunities to address strategic needs that could be market expansion or capability gaps, both human and technical. Smaller to midsize deals are always the bulk of transactions; they carry relatively less risk, generally attract less regulatory scrutiny, and provide greater opportunities for growth.

That doesn’t mean that business owners should put a business sale on the back burner. Rather, they should use this time to get the business in the best shape to sell.

For example, focus on creating transferrable value. Maximise earnings, minimise risks and secure your most valuable assets, such as contracts, intellectual property, or skilled employees.

The latest EY CEO Outlook Pulse survey noted that 98% of CEOs anticipate actively engaging in strategic transactions within 12 months, an increase of 9% over the 89% reported in January 2023. Moreover, with interest remaining high, both trade and financial buyers are seeing the attraction of smaller deals as a means to diversification and growth.

This is a time for both buyers and sellers to consider the opportunities that 2024 will bring.

If you would like advice on whether your business is ready for sale, please call us on 0118 959 8224 or contact us at info@evolutioncbs.co.uk.

So how do you address the question of building future Equity Value into the business? Firstly, you must start with the end in sight by putting yourself in the shoes of the future acquirer and asking, “What does hold value in the eyes of a purchaser?” This will require some lateral thinking and ultimately a bit of putting your house in order, so to speak.

When deciding upon the value of a Company, acquirers will consider a range of metrics, as part of their initial assessment of where and why they see value in the business. Importantly, although there are many potential deal structures underpinning any transaction, the starting point for pretty much every business valuation will be to consider the perceived risk in the proposed transaction against the business’ trading fundamentals such as turnover, profitability, cash flow and net worth. Buyers and investors want to know what the balance is between ‘risk and reward’ and they’ll consider this against the backdrop of anything they can see, feel and evidence about the business that gives them confidence in its success.

As part of this exercise, alongside the proven training history of the business – as seen in its Profit & Loss data, the Company Balance Sheet will almost certainly feature highly in their assessment of risk. Buyers will look for elements they can see, including the Company’s Equity Value/Shareholders’ Equity, which give them reassurance as to the underlying substance and sustainability of earnings for the business. This indicates not only that the business’ liabilities can and have been satisfactorily dealt with over time, but also that the business has sufficient assets in the background to enable it to survive and prosper in difficult times.

As far as those liabilities are concerned, it’s not a bad idea to limit your exposure to current liabilities, particularly if the majority of these liabilities are loans/lines of credit, (in contrast to cash advances linked to future orders of products/services). Crucially long-term debts owed will feature in any sale, as typically most offers are made on a ‘cash and debt-free’ basis. Thought should be given to any deferred tax liabilities as these will need to be addressed by lawyers/tax specialists during the Due Diligence exercise.

Keeping a healthy amount of cash on the Balance Sheet is also not problematic – and a positive trend in the cash balance of the Company over a period of a few years will certainly do no harm and reinforce your Equity Value, as will ensuring your property, plant and equipment are not in a state of disrepair or dilapidation.

Intangible assets can also make a positive contribution, such as ensuring you have decent written contracts with clients and that any Intellectual Property (IP) is secure (or the relevant copyright is in place for any trademarks or patents) and thus can factor in the acquirer’s approach to valuation.

There are untold benefits to applying some of the above ‘financial hygiene’ in your day-to-day business operations, including the ability to attract Growth Capital. The Deal Team at EvolutionCBS has an excellent track record of supporting and assisting Company owners/shareholders in securing Growth Capital investments.

For context, Growth Capital is essentially funding/investment, which can be utilised for future infrastructure and growth plans. Where there is a demonstrably profitable trading history and a healthy Balance Sheet (including Equity Value), then Growth Capital funding can be obtained from various sources, such as banks, Private Equity firms, or other financial investors and institutions.

In one example, EvolutionCBS assisted a Growth Capital transaction with the existing management team at ERA, who help businesses in the media and entertainments sectors scale up their IT infrastructure to meet increasingly sophisticated editing and rendering requirements.

As part of this work, the Deal Team at EvolutionCBS, spent considerable time with the leadership at ERA, to identify their needs and to discern whether Growth Capital was a route to achieving their objectives. This meant a number of financial investors and organisations were identified and approached by the EvolutionCBS Deal Team, acting on behalf of ERA.

Ultimately, EvolutionCBS engaged with Rockpool Investments, a financial investor dedicated to creating opportunities for High-Net-Worth Individuals (HNWIs) to invest in private companies. Rockpool provides equity and loan financing of between £3m to £12m to profitable UK-based private companies and has invested over £550m since inception.

Steve Barry, Senior Client Director at EvolutionCBS, who led the transaction, commented:

“We are absolutely delighted for the management team at ERA – Growth Capital funding can be a source of unlocking significant future successes. Additionally, this transaction features an excellent business active within the technology-enabled Media and Entertainment industry, engaging with a financial investor committed to the longer-term success of this great business.”

Similarly, the Deal Team at EvolutionCBS worked with Phoebus Software (PSL), a market leading provider to the banking, lending and savings sectors, delivering innovative and seamless solutions for the origination and management of loans and savings accounts. EvolutionCBS ultimately went on to help PSL attract substantial financial investment to support the step change in their growth plans as the business aspired to accelerate its growth trajectory for the future.

Part of this work involved the shareholders considering their longer-term strategic plan to exit the Company, which meant supporting the existing management to promote and unite under their long-established MD as he stepped up into the role of CEO, and then introducing the leadership to NorthEdge Capital, a financial investment firm that supports MBOs, development capital and equity release transactions.

Steve Barry, Senior Client Director at EvolutionCBS, who also led this transaction, commented:

“EvolutionCBS had been supporting Phoebus since late 2015, assisting them in preparing for Robert and Peter’s retirement from the business. Accordingly, we were delighted to introduce the team at Northedge, who provided the funding necessary for the business to go on to achieve its future growth plans.”

In conclusion, company owners/shareholders addressing the question of “How can I build future value into the business?” would be wise to pay attention to their ‘financial hygiene’, essential for a healthy Balance Sheet, alongside continuing to drive turnover and profitability. Lastly, harnessing the acumen of an experienced M&A advisor will also do no harm and could ultimately help you access significant future growth.”

************

To find out more about what’s involved in selling a business and how to begin your preparations, please join us for a free Business Owners Masterclass on 5th October aboard HMS Belfast in London.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment. 

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment. 

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

It is not only the sector’s diverse and sizeable client base that is placing significant demands on HVAC and other associated ‘Hard FM’ focused companies, there are also a range of strategic and financial buyers, including Private Equity firms, that are very keen on acquiring in the sector.

The deal team at EvolutionCBS can point to its own experience of strong demand in the HVAC Sector, when it led the sale of Synecore Limited to H.I.G. Capital (“H.I.G.”), a leading global alternative asset investment firm with £44 billion of equity capital under management, (the terms of the deal were not released).

With a strong pedigree in their sector, Synecore Limited is a leading provider of specialist Mechanical and Electrical servicing and maintenance in the South-East of England, with expertise in HVAC, Refrigeration, Electrical Design and Installation, Air Conditioning, Air purifiers, Refrigeration and Cold Rooms, combined with a full suite of services and maintenance works.

Steve Barry, Senior Client Director at EvolutionCBS, who led the sale, comments on the demand for ‘Hard FM’ and HVAC companies:

“There is strong market demand for acquisitions in the ‘Hard FM’ and HVAC sectors, driven by various factors, including the need to optimise energy efficiency and the increasing integration of the Internet of Things (IoT) technology. Our team focused on managing the entire sale process, facilitating negotiations and latterly due diligence in a competitive process where there was notably strong interest in the opportunity right from the start.”

EvolutionCBS is engaging regularly with international acquirers actively seeking acquisitions in the UK, including those seeking companies offering HVAC, ‘Hard’ and ‘Soft’ Facilities Management and related technical services.

In one example, our Deal Team engaged with a multinational organisation, headquartered in Western Europe, with revenues in excess of £10bn. This acquirer is actively seeking UK acquisition targets, has significant cash on their Balance Sheet in excess of £2bn and is in close contact with the EvolutionCBS team. Crucially, this organisation is very interested in HVAC and Facilities Management companies in the UK, to support their strategic objectives in the UK and Europe.

An analysis of 29 company sale transactions from the start of the decade involving HVAC and facilities management companies, has revealed a diverse range of acquirers. Both Private Equity firms and very large Property Services and Facilities Management organisations are clearly shown to be active in the sector.

North American acquirers also feature in British deals, with both USA and Canada-based organisations having completed transactions, purchasing companies active in critical building services, such as plumbing, heating, air-conditioning, refrigeration, mechanical and electrical maintenance, and energy systems services.

One headline-grabbing deal, the 2021 acquisition of Pimlico Plumbers, Central London’s leading independent maintenance company, by USA-based Neighborly, Inc. the world’s largest franchisor of home service brands, highlights both the demand in the space and the attractiveness of Britain for overseas investors.

Mike Bidwell, President and CEO of Neighborly, commented on the transaction:

“We are thrilled to be growing our global footprint with the addition of Pimlico as the next subsidiary brand to join our global family of home service professionals. We are excited for the growth to come for both Pimlico and Neighborly as a result of this acquisition.”

It’s worth noting that the UK market remains attractive to multinationals and financial buyers alike, despite economic headwinds in the form of higher inflation and the impact of the Russia-Ukraine war. This strong demand for acquisitions from diverse types of acquirers, could mean the time could be right for HVAC and FM company owners, who want to explore a sale to test the market.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment. 

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment. 

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

In 2022, both trade and private equity buyers were interested in the growth potential of small to medium companies (between £0.5m and £50m revenues) across various sectors. Under the same criteria, ‘Industrials’ was a busy sector last year with almost one third of acquired companies falling under this categorisation.¹

In this context, it is important for the seller to understand any buyer’s motivation and future plans for the business, otherwise it will lead to a culture clash and eventually to an integration failure. Nolan John, our Research and Insights Manager, recently wrote an article on the importance of “Cultural Fit in M&A” which can be read here.

Trade Sale

A ‘Trade Sale’ involves selling the business to another company within a similar or complementary industry either in the same operating country or increasingly from overseas.

For example, an automotive parts manufacturing company being acquired by another automotive parts manufacturing company to expand its product line and increase the customer base would be a typical ‘Trade Sale’.

There may be various motivations for the acquirer and his interest in your business. Whether it is for an increased market share, new product line, or to enter a new geography, a trade buyer may be willing to pay a premium for the business, especially if it has a strong brand, loyal customer base, or unique intellectual property.

For the sellers, a ‘Trade Sale’ typically offers an earlier exit premium to synchronise the synergies with the buyer and to add strategic value to the business.

Private Equity Sale

When referring to a ‘Private Equity Sale’, we are typically talking about a transaction that involves selling the business to some form of Financial Investor such as a Private Equity firm, ‘Family Office’ or even a group of ‘high net worth’ or institutional investors.

Private Equity firms typically invest in companies with higher growth potential and are often willing to purchase either all or part of your shareholding; enabling them to take an active role in managing the business alongside you for a period which may vary from deal to deal. They may provide capital, expertise, resources and networks to help the business grow and achieve its objectives.

Typically, a Private Equity company will have its own financial, operational and sector focused metrics against which the agreed growth plan would be measured. This does however vary widely, dependant on whether the transaction is a ‘platform acquisition’ or a ‘bolt on’ acquisition to a business or collection of businesses in which they are already investing.

In these circumstances, it is vital for the seller to understand the experience of the investors that will take over the business – and the culture and objectives of the investing company – but sellers should always bear in mind that the fundamental operating model of a Private Equity firm will be to invest in companies that they can help to grow, both operationally and financially, in such a way as to enable the collective shareholders to realise added value on exit after a period of time.

Conclusion

In summary, both Trade and Private Equity buyers can provide significant benefits to the owner and the business. A Trade Sale can provide access to new markets, resources and technologies, whilst a Private Equity Sale can provide access to all these plus the capital and expertise needed to support such growth.

However, it is important to carefully consider the options in order to select the one that is best for the business and its stakeholders.

Please see this space for more detailed view on both the types of exits in coming weeks.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides them with pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment. 

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment. 

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

source:

S&P CapitalIQ : screening of transactions with target companies having revenues between £0.5m to £50m between 01/01/2022 to 31/12/2022.