M&A ACTIVITY SHOWS NO SIGN OF SLOWING DOWN The resilience of the UK’s mergers and acquisition market is clear in a new M&A report published by market researchers Experian

Deal volumes for mergers and acquisitions approached pre-pandemic levels in the final quarter of last year, and a flurry of multi-billion-pound acquisitions towards the end of the year saw annual transaction value eventually eclipse that of 2019.

Logistical difficulties thrown up by Covid-19 were brushed aside by dealmakers quick to adapt to changing circumstances.

Tech deals, which had already started to dominate the UK’s M&A landscape in recent years, seem to have accelerated that process.

Writing in the foreword of the new report, Jane Turner, Research Manager, Experian MarketIQ, said: “Having spent time taking stock and shoring up the capital positions of their portfolio companies in the immediate aftermath of lockdown, the private equity sector played an increasingly key role on the buy-side in the last two quarters of 2020.

“We expect this to continue into the new year. However, whether the wider market will undergo any dampening effect due to January’s third national coronavirus lockdown in England remains to be seen.”

And some of our professional firms across the region have been particularly active.

Harrison Clark Rickerbys, which has its headquarters in Worcester, ranked third most active legal adviser in the report, rising from seventh position in 2019.

The firm again ranked most active in the South West, having completed nearly three times as many deals as the next legal adviser – and is in pole position in the South East.

Tim Ward, Head of Corporate in the law firm’s Cheltenham office, said: “The market remains busy. Businesses are looking for opportunities despite the challenges of lockdowns and Brexit.”

The firm was also ranked second in both the east of England and the Midlands.

Its team has been ranked second in the South West and rose eight places in the national rankings to be named the sixth most active adviser in the UK.

The annual report also placed Hazlewoods number three in the Midlands, fifth in London and in the top 10 in the North West, South East, East of England and Yorkshire and Humber.

Corporate Finance Partner, Paul Fussell, said: “Covid-19 caused uncertainty for many companies, and although deals in

Cheltenham-based BPE Solicitors’ Corporate Team gained five places in the rankings for the South West.

With 13 reported deals in 2020, the corporate team becomes the second most active legal adviser in the South West due to the value of the deals the team advised on.

Louise Grzasko, Partner and Corporate Team Leader, said: “To be the second most active adviser in the South West during 2020 is a real achievement, especially given the circumstances in which we were working. I am proud of what the team achieved last year and expect to be even busier this year.” certain sectors were put on hold, other sectors continued with buy and build strategies.

Cheltenham-based accountants Hazlewoods are listed as a top 10 UK adviser in the report.

“By the end of the year we saw a strong recovery in the M&A landscape, with deal volumes bouncing back to pre-pandemic levels, helped in part by sellers fearing possible changes in capital gains tax rules ahead of the March Budget.

“The outlook for 2021 is already looking strong."

Hazlewoods’ corporate finance team advised on 133 completed deals in 2020, with a total value of more than £763 million. They saw a continuous volume of deals in sector specialisms such as veterinary and health and care, as well as the general market.

Experian recorded a total of 5,867 transactions involving a UK-based firm in 2020, a decline of 15 per cent on the 6,894 deals carried out in 2019 and the lowest figure since 2012.

In the second quarter, deal making was at its lowest ebb since the first quarter of

2009 at the height of the financial crisis. Although annual volume is significantly down on previous years, the direction of travel looks positive says Experian.

The number of deals announced in Q4 was around 42 per cent higher than in Q2 and it seems that increasing numbers of companies are looking to growth by acquisition. Some big-ticket deal making at the end of the year – with more than £120 billion worth of acquisitions carried out in the last two months alone –pushed the overall value of UK deals for 2020 to £356 billion, up by 79 per cent on a year-on-year basis.

Information sourced from: United Kingdom and Republic of Ireland, M&A Review. Experian Business Research: 2020