Latest trends in SME mergers and acquisitions

With the prospect of a ‘no deal’ Brexit looming, our Corporate Finance team looks at the latest trends impacting on mergers and acquisitions (M&A) in the small and medium-sized (SME) market.

Corporate Finance Manager Phil Redgate explains.

In amongst the World Cup fever and extraordinary Thai cave rescue which gripped the nation in June and July 2018, the prospect of a ‘no deal’ Brexit became a genuine possibility.

This has brought an added level of uncertainty to both UK and European businesses but is also undoubtedly presenting new opportunities for the SME market.

The impact Brexit is having on UK M&A is by no means clear cut. The latest H1 2018 Experian M&A Review shows overall UK deal values are up 37% when compared to the same period 2017, despite a 14% drop in deal volumes over that timeframe.

At Bishop Fleming Corporate Finance, we have experienced a large number of European and overseas buyers looking to gain a foothold in the UK prior to Brexit. It is often much easier for such corporates to acquire an existing business in the UK, rather than set up a UK subsidiary from scratch.

We have recently completed deals involving French, Italian, Norwegian, Thai and US companies.

The recent sale of Danbury MotorCaravans to the French motorhome group Pilote provides a great example. The acquisition of this caravan conversion company has given Pilote not only an extremely strong brand in Danbury, but also immediate access to the UK motorcaravan market and a UK based manufacturing site. This is ideal planning for a post-Brexit Europe.

With less than 9 months until the UK will officially leave the EU, it is inevitable that further European and overseas buyers will be on the UK acquisition trail. SME owner managers should be considering whether it’s time to acquire a foothold on the continent or take the opportunity of overseas demand to realise value in their own business.

Bishop Fleming provides a comprehensive range of corporate finance advisory services. Our typical areas of expertise include: M&A Lead advisory (disposals and acquisitions), Management buy-out, Due diligence, Exit Planning, Finance raising and grant services, Strategic advisory services, Strategic board support, Business Planning and modelling, Options appraisals, and Valuation.

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For more information please contact a member of our Corporate Finance team.