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January 21, 2018

2017 ENDS ON A POSITIVE NOTE FOR M&A ACTIVITY IN THE UK

We catch up with Matthew Sutton, director at Greenaway Scott, as he contemplates merger and acquisition performance in 2017.

 

Despite an uncertain political backdrop in the Britain, merger and acquisition (M&A) activity has remained relatively stable over the last year and the overall outlook is looking positive, with records showing that whilst deal volumes have dropped slightly since 2016, the overall value of transactions are maintaining a respectable.

 

In Experian’s published market IQ report, the total value of M&A activity across the UK reached £217bn in 2017 which is an uplift of almost 30% on activity recorded for the previous year. It has been suggested that institutional lending played a major part as M&A funding continuing to rise throughout the year. It is considered that Institutional funding is now responsible for up to 70% of all transactions.

 

Funding options such as asset-based financing, private equity and crowdfunding has also provided alternative funding in the market which will provide a further boost to M&A activity. The rise in alternative finance presents a challenge to traditional lenders, as borrowers, particularly start-up companies are taking a cautious approach to debt-based lending and are looking to unconventional means of funding instead. 

 

Whilst the rise in the value of deals in the UK in 2017 can be partly attributed to an increasingly active private equity market, it has perhaps surprisingly also been strengthened by an increase in cross-border transactions. The acquisition of UK companies by foreign companies abroad appears to have slowed perhaps in response to the uncertainties around Brexit. However, the cross-border acquisition of overseas companies by UK companies has continued to rise with 33 successful M&A transactions being recorded in the UK in 2017 amounting to a total overall value of £51.1bn.

 

In the latter part of 2017, in particular, saw a considerable increase in the value of cross-border deals involving UK companies with 163 transactions taking place between July and September at a combined value of £84.6 billion compared to the 241 transactions which took place in the quarter being valued at £33.2bn. In looking forward to 2018, Corporate Finance experts have reported that they are predicting continued cross-border activity in both directions from Europe, the Middle East and Africa based companies and investors.

 

In Wales, M&A activity throughout the past 12 months has also been promising with the total value of corporate transactions totalling more than £560m last year, much of which can be attributed to increased cross-border activity and a rise in the overall value of deals.

 

The corporate team at Greenaway Scott has seen a overall increase in cross-border activity, having recently advised UK headquartered medical device manufacturer, Flexicare (Group) Limited on their acquisition of Netherlands based medical manufacturer Medisize B.V. Over the past 12 months we have also advised German bitcoin exchange company Vaultoro on its seven-figure investment from German-based fintech investor Finlab AG and US-based medical device company Clinical Innovations Inc on its acquisition of German-based medical distributor Brenner Medical GmbH earlier this year.

 

This article was first published on Business Wales on the 21st Jan 2018

Matthew Sutton, director at Greenaway Scott, reflects on the past year and how merger and acquisition activity has performed.

Despite an uncertain political backdrop in the UK, merger and acquisition (M&A) activity has remained relatively stable over the past 12 months and the overall outlook is positive, with records showing that whilst deal volumes have dropped slightly since 2016, the overall value of transactions is on the rise.
According to Experian’s market IQ report, the total value of M&A activity across the UK reached £217bn in 2017 which is an increase of almost 30 per cent on activity recorded for the year before. It has been suggested that institutional lending played a large part with M&A funding continuing to increase throughout the year. It is estimated that Institutional funding is now utilised in up to 70 per cent of all transactions.

Alternative funding options such as asset-based financing, private equity and crowdfunding has also enhanced available funding in the market which will provide a further boost to M&A activity.  This increase in alternative funding presents a challenge to traditional lenders, as borrowers, particularly start-up companies are taking a cautious approach to debt-based lending and instead looking to unconventional means of funding.

Whilst the rise in the value of deals in the UK in 2017 can be partly attributed to an increasingly active private equity market, it has perhaps surprisingly also been strengthened by an increase in cross-border transactions. The acquisition of UK companies by foreign companies abroad appears to have slowed perhaps in response to the uncertainties around Brexit. However, the cross border acquisition of foreign companies by UK companies has continued to rise with 33 successful outward M&A transactions being recorded in the UK in 2017 amounting to a total overall value of £51.1bn.

The third quarter of 2017 in particular saw a considerable increase in the value of cross-border deals involving UK companies with 163 transactions taking place between July and September at a combined value of £84.6 billion compared to the 241 transactions which took place in quarter being valued at £33.2bn. In looking forward to 2018, Corporate Finance experts have reported that they are anticipating continued cross border activity in both directions from Europe, the Middle East and Africa based companies and investors.

In Wales, M&A activity throughout the past 12 months has also been promising with the total value of corporate transactions amounting to more than £560m in Wales last year much of which can be attributed to increased cross border activity and a rise in the overall value of transactions.

The corporate team at Greenaway Scott has seen a general increase in cross border activity, having recently advised UK headquartered medical device manufacturer, Flexicare (Group) Limited on their acquisition of Netherlands based medical manufacturer Medisize B.V. Over the past 12 months we have also advised German bitcoin exchange company Vaultoro on its seven figure investment from German based fintech investor Finlab AG and US based medical device company Clinical Innovations Inc on its acquisition of German based medical distributer Brenner Medical GmbH earlier this year.

BECOME AN 

Matthew Sutton, director at Greenaway Scott, reflects on the past year and how merger and acquisition activity has performed.

 

Despite an uncertain political backdrop in the UK, merger and acquisition (M&A) activity has remained relatively stable over the past 12 months and the overall outlook is positive, with records showing that whilst deal volumes have dropped slightly since 2016, the overall value of transactions is on the rise.

According to Experian’s market IQ report, the total value of M&A activity across the UK reached £217bn in 2017 which is an increase of almost 30 per cent on activity recorded for the year before. It has been suggested that institutional lending played a large part with M&A funding continuing to increase throughout the year. It is estimated that Institutional funding is now utilised in up to 70 per cent of all transactions.

 

Alternative funding options such as asset-based financing, private equity and crowdfunding has also enhanced available funding in the market which will provide a further boost to M&A activity. This increase in alternative funding presents a challenge to traditional lenders, as borrowers, particularly start-up companies are taking a cautious approach to debt-based lending and instead looking to unconventional means of funding.

 

Whilst the rise in the value of deals in the UK in 2017 can be partly attributed to an increasingly active private equity market, it has perhaps surprisingly also been strengthened by an increase in cross-border transactions. The acquisition of UK companies by foreign companies abroad appears to have slowed perhaps in response to the uncertainties around Brexit. However, the cross border acquisition of foreign companies by UK companies has continued to rise with 33 successful outward M&A transactions being recorded in the UK in 2017 amounting to a total overall value of £51.1bn.

 

The third quarter of 2017 in particular saw a considerable increase in the value of cross-border deals involving UK companies with 163 transactions taking place between July and September at a combined value of £84.6 billion compared to the 241 transactions which took place in quarter being valued at £33.2bn. In looking forward to 2018, Corporate Finance experts have reported that they are anticipating continued cross border activity in both directions from Europe, the Middle East and Africa based companies and investors.

 

In Wales, M&A activity throughout the past 12 months has also been promising with the total value of corporate transactions amounting to more than £560m in Wales last year much of which can be attributed to increased cross border activity and a rise in the overall value of transactions.

 

The corporate team at Greenaway Scott has seen a general increase in cross border activity, having recently advised UK headquartered medical device manufacturer, Flexicare (Group) Limited on their acquisition of Netherlands based medical manufacturer Medisize B.V. Over the past 12 months we have also advised German bitcoin exchange company Vaultoro on its seven figure investment from German based fintech investor Finlab AG and US based medical device company Clinical Innovations Inc on its acquisition of German based medical distributer Brenner Medical GmbH earlier this year.

 

 

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