M&A on AIM doubles as market continues revival

Merger and acquisition activity on London's AIM market continued its upward curve by hitting four-year highs, our findings show.

The volume and value of acquisitions on the Alternative Investment Market (AIM) hit 181 and £1.66 billion during 2013, GrowthBusiness can reveal.

Our M&A on AIM 2014 report shows that the junior market hit highs never before seen during the four years that research has been carried out.

The report, carried out in partnership with Crowe Clark Whitehill and Minerva, finds that deal volumes and values climbed from 146 and £876 million during 2012.

Sales of subsidiaries or business units by AIM businesses also reached a four-year high, represented by 82 deals worth £763 million.

Robin Stevens, head of capital markets at Crowe Clark Whitehill, believes that AIM is experiencing a marked increase in confidence, resulting in higher company valuations and greater investor appetite.

‘The resurgence of interest in AIM from investors and emerging companies around the world underpins growing M&A activity levels and valuations for sellers using AIM as a staged exit strategy,’ he adds.

More from previous reports:

Alongside growth in volume and value, GrowthBusiness also finds that a greater proportion of deals are being satisfied using cash rather than shares, and in a more upfront way. A total of 91 per cent of all deal value during 2013 consisted of cash payments, up from 80 per cent in 2012.

The resurgence of AIM as a platform for acquisitions follows a difficult few periods in the aftermath of the recession when a number of listed firms found it hard to raise money and close deals. Growth during 2013 has been achieved despite a dip in the wider M&A market.

Despite recording an identical number of deals during 2012 and 2013 (1,099), Mergermarket found that transaction value dipped by 11.5 per cent from £80.7 billion in 2012 to £71.4 billion in 2013.

Minerva director Gavin Wilkins says that the ‘big uptick’ recorded in M&A activity seen on AIM during 2013 is very encouraging for all that are active in the market.

Trends already noted during the first quarter of 2014 find that, if activity is continued at the same pace for the rest of the year, new record figures will be recorded.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for GrowthBusiness.co.uk from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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