While in the public company world bid activity levels during the first half of 2017 increased on previous years, what trends are we at MBM seeing in the entrepreneurial private company space?
Overall in the U.K., after a sluggish start to the year, activity has picked up, despite political uncertainty such as the Brexit effect and other geo-political events. Favourable exchange rates have created opportunities for overseas bidders seeking to acquire U.K. targets. Some buyers are looking to diversify away from issues in their own core markets while others are seeking to complement or fill a gap in their service or product offering or address internal succession planning. Financial backers continue to pursue buy and build strategies and some bidders and targets seem willing to pursue strategic transactions despite the continued volatility in the world. There is significant competition for quality assets and Scotland’s strong technology-focussed and IP-rich businesses are an attractive target for acquirers. It is reported that M&A involving British companies accounted for one in ten e-commerce deals in the first half of 2017 and in fintech and IT, the U.K. received more funds from U.S. investors than any other European country.
In the U.S. market, activity in the technology deal sector overall remained relatively quiet; the slowdown was caused in part by an increasing shift towards smaller transactions and a decline in corporate-to-corporate transactions while the software sub-sector continued to dominate deals in terms of volume.
Trends that we are seeing in the local entrepreneurial space include:
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