Foreign buyers drive surge in deal values and trade sales

Date

  • Value of completed deals increased by 23 per cent between 2010 and 2011
  • 30 per cent increase in deals
  • 80 per cent of trade sales were cross border transactions

With foreign buyers dominating trade sales and driving up deal values, now is the perfect time to sell your business, according to dealmakers at Clearwater Corporate Finance.

The announcement comes after Clearwater completed 30 deals worth an aggregate of £685m in 2011, up from 23 deals in 2010 worth an aggregate of £558m. Foreign buyers accounted for 80 per cent of its trade sales, compared to 63 per cent in 2010, as cross border transactions continued to lead M&A activity. Private equity was involved in half of Clearwater’s transactions.

Phil Burns said: “Now is the perfect time to sell your business as valuations are being driven up by fierce competition between buyers, but also a flight to safety from the Eurozone is fuelling interest from foreign corporates in the UK market. For business-owners, the tax environment is extremely positive and as long as that continues, we expect to see more entrepreneurs exit their businesses.”

Support services and industrials were the most active sectors for Clearwater with 10 deals and eight deals, respectively. In 2011, Clearwater completed the sale of 12 businesses to cross border buyers including Alter Technology to TÜV Nord and the sale of Femcare to Utah Medical. Clearwater also worked on a number of high profile private equity investments including Provimi Petfood, Fourth Hospitality, WRG, Wells Plastics and Kirona.

Phil Burns, managing partner at Clearwater said: “The industrials sector has been a key force behind the increasing number of cross border transactions. In particular, Chinese and Indian groups are looking to cash in on British technical expertise by targeting UK specialist aerospace and automotive firms to bolster their own industries and satisfy strict customer supply chains.

“As for support services, the human capital, facilities management, outsourcing and test, inspection and certification sectors all witnessed increased activity, benefiting from market consolidation and acquisitive corporates in search of bolt-on acquisitions.”