Deal activity has significantly increased over the first six months of 2024, against a backdrop of complex geopolitical factors challenging markets. Deal activity was comprised of corporate transactions and strategic acquisitions, largely underpinned by an increasing appetite for M&A.

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.