The recovery of the mergers and acquisition market

As life begins to stabilise, we are seeing a return to normality within the business world, particularly within Mergers and Acquisitions (M&A), which is providing us with an indicator of returning confidence in the  global economy. Whilst last year was one of uncertainty, the first four months of 2021 has seen a steady return to normality which has been mirrored by the normalisation of the M&A market.

The Refinitiv EMEA Mid-Market Insight published in April 2021 highlights some promising trends, including an increase in global deal volumes. Refintiv found that of the world’s top thirty financial advisers only five saw a decrease in transaction volumes when comparing the first four months of 2020 and 2021. In addition to this, there is a noted rise in  overall deal values when comparing year-on-year.

Closer to home these trends are particularly prevalent within the technology, financial and energy sectors. Technology has also been an area of interest within the UK’s M&A with Refinitiv finding that 31% of qualifying deals involved a technology company. This is hardly surprising with Verdict reporting that the UK held a 24.7% share of the global technology sector at the end of 2020. Notable deals within this sector include The Panoply Holdings plc acquisition of Keep IT Simple Ltd and Brightstar Corporation acquisition of Lucid Products Ltd. Refinitiv also reported that 13% of UK deals during the first four months of 2021 included a company within the financial sector.. The UK energy sector saw high levels of interest from overseas acquirers including Australia based Origin Energy Ltd’s acquisition of Octopus Energy Group Ltd, and Japan based JERA Co Inc’s acquisition of MC GFS Investment Co Ltd.

These trends are certainly reflected within our experience at KBS Corporate, during 2021 a large portion of our deals involved clients within these ‘top three’ sectors. In addition to this, K3 Capital has also seen an increase of deal volumes  through the completion of 60 more qualifying deals  – a 109% increase when comparing year-on-year figures. This places K3 Capital as Refinitiv’s most active financial adviser within the UK, completing 115 deals between January and April  – 21% more than our nearest competitor.

The appetite for mergers and acquisitions is returning both within the size of deals and sheer volume of transactions.