The past year has paid testament to the resilience of the UK’s M&A market.
Despite the difficult global climate in the last 12 months due to the COVID-19 pandemic, Business Intelligence experts, Bureau Van Dijk, recorded a total of 7,688 deals involving UK businesses in 2020, an increase of almost 10% over two years. Of these deals, 22% involved overseas acquirers, and 13% involved UK Private Equity firms, with 1 in 8 UK deals involving a plc acquirer.
Some of the biggest trade buyers of 2020 included Marlowe plc making 13 deals, Independent Wealth Planners UK Ltd completing 9 deals and ClearCourse Partnership LLP, Aston Lark Ltd and PIB Group Ltd all carrying out 6 deals.
The Insurance sector was especially active in 2020, with the number of UK deals increasing by 32% compared to 2019, and the global transaction value for the sector exceeded £158bn.
Many private equity firms are fuelling activity by investing billions in equity, as companies that demonstrate sustainable profits and growth experience high demand. Private Equity firms started 2020 with a record $1.5 trillion in unspent capital globally, ready to pour into companies and new business ventures.
We believe that the M&A market will continue to grow in 2021 due to the announcement of the Spring Budget in March that Capital Gains Tax will remain at 20%. It had previously been believed it would be increased to recoup some of the growing costs of the COVID-19 pandemic, however it is now set to continue until the next budget review. In addition to this, Business Asset Disposal Relief (BADR), previously known as Entrepreneurs’ Relief, has also remained untouched. This means that business owners who opt to sell all or part of their shares, will pay just 10% tax on the first £1m of gains on qualifying assets.
Therefore, for company owners, now is a particularly opportune time to consider the value of your business and contemplate potential exit strategies to harness the benefits of the current favourable market conditions.
Our highly experienced team provided over 3,100 business valuations last year, and can assist you in realising the value of your company. Whether you are considering exit strategy options or exploring another avenue, you can call our team in confidence on 0203 441 2003. Alternatively, you can use our free, online valuation calculator to determine the value of your company.