As experienced investors know only too well, it is far easier to put money into a company than it is to get it back out. Some worrying figures produced earlier this year by the Office of National Statistics suggested that M&A activity had slipped to its lowest level since they began keeping records.
There are, however, signs that things are changing. Over the past year there have been some technology exits at breathtaking prices (more so in America than Europe) and it has been a great year for IPOs.
With a gradual recovery in the banking sector, let us hope that we will see some recovery in traditional M&A activity in the year ahead. There must be many thousands of SMEs effectively “locked up” by the banking system whose owners saw them as their pension but are now struggling to get out. This is a time of opportunity for the Corporate Finance community to come up with creative solutions to assist Buyers and Sellers alike to do deals in a way which meets the reasonable aspirations of both sides.
Much could be done to stimulate economic growth by increasing this type of activity so that “tired” businesses can be passed on to energetic new management to stimulate new investment and create more sustainable employment.