The value of M&A deals involving private UK companies has plummeted, according to research by accountancy firm UHY Hacker Young.
The value of M&A deals involving private UK companies has plummeted, according to research by accountancy firm UHY Hacker Young.
In the year to July, the combined value of private company deals fell by 65 per cent to £6.8 million. Chris Lowry, partner at UHY Hacker Young, said: ‘M&A transactions can be risky even in the best of times. With so much uncertainty about the shape of the economic recovery, trade buyers have been nervous about stretching themselves either on the financial or the management front.’
The research also reveals that the market for private companies has been more adversely affected than that of acquisitions involving larger companies, as overall deal values, including listed companies, has fallen by only 59 per cent over the same period. In addition, the total number of private companies that were acquired dropped by 38 per cent to 1,453.
Says Lowry: ‘Banks are still unwilling to offer funding to get M&A deals completed, so that will continue to be a major barrier where trade buyers are often too small to tap the capital markets to replace bank lending. There may be very good opportunities around, but if the company can’t find money to fund the deal, the journey pretty much stops there.’
