The past few years has paid testament to the resilience of the UK’s M&A market.
Between 2013 and 2018, the volume of acquisitions made by UK acquirers has increased by over 80%, highlighting the increasing activity within the UK mid-market. The second half of 2018 saw a rise in M&A activity with a buoyant market and favourable tax benefits for shareholders supported by a 70% increase in acquisitions of UK-based companies, compared to the previous same period of 2017. This wide spread growth is taking the UK M&A prospects from strength to strength, resulting in the incredibly strong, prosperous market of 2019.
One of many reasons for this is the current capital gains tax legislation, which states that through the Entrepreneur’s Relief scheme, shareholders could potentially pay less tax on the sale of business assets than they have done previously. This can be as low as 10% compared to previous rates of up to 40%, representing a huge saving when owners look to maximise their return on effort.
Additionally, many private equity groups are fueling the activity by investing billions into deals, as companies that demonstrate sustainable profits and growth become highly demanded. Ultimately, a record US$453 billion worth of global private equity funds were made in 2017, leaving the industry with more than US$1 trillion to pour into companies and new business ventures in 2018 and beyond. This resulted in H2 2018 witnessing an increase of 56% in the number of transactions between UK based sellers and private equity houses, compared to H2 2017, a trend which is continuing into 2019.
This highlights not only the current strength of the M&A market in general, but also the levels of demand for successful, profitable companies. 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.
The first steps of entry into the M&A market start with a company valuation, which is a straightforward, free and convenient calculator.
Please take a few minutes to fill out the valuation calculator, or contact us for any further information you may require.