Regional Breakfast seminar

On the 18th of September, MarktoMarket hosted its fourth regional breakfast seminar of the year, this time located in London. Doug Lawson, CEO and Co-Founder of MarktoMarket, was joined by Simon Woodcock, Partner at LAVA Advisory Partners.  Below is a summary of the discussion that took place throughout the morning.

Key themes

Below are some of the key themes and observations that emerged from the breakfast seminar:

There is a strong correlation between M&A trends in the South East/ London and the rest of the UK and we expect 2024 transaction volumes to finish the year at a level similar to pre-covid levels. The South East/London share of the UK M&A market trends around 30-35%.

Valuation multiples have been declining for Nano Cap (£0-£2.5 million) deals over the past 4 years but flattened in H1 2024 versus 2023.  Micro Cap (£2.5-£10 million)  and Small-ap (£10-£50 million) multiples fell in H1 2024 but there was some stabilisation in Mid Cap (£50-250 million) valuations after heavy falls in 2023.

Looking at the buyer landscape, private equity-backed platforms (rather than direct PE acquisitions) are becoming an increasingly common ‘buyer type’.  Most mid-market PE funds are deploying this strategy, bringing smaller assets into the orbit of financial acquirers (albeit not directly).

The consensus is that deals are taking longer to complete.  If capital gains tax rises are flagged in the October budget for implementation at the beginning of the 2025/26 tax year, we may witness a flurry of M&A activity as owners rush to exit before the April deadline. Taking a more pragmatic approach to potential increases is advisable – capital gains tax increases should not be the sole driver of a decision to exit or not.

Insurance broking, accountancy, wealth management and fire safety services have been ‘hot’ sectors recently.  The defence sector is showing signs of a resurgence.  Demand has been falling for assets in the consumer services sector since 2021.

EoT (Employee Ownership Trusts) were discussed.  This is a viable and tax efficient exit route for businesses, especially professional services firms where employee engagement and retention is critical.

Thank you to all those who attended and a special thanks to Simon Woodcock for joining the panel.

WATCH THE VIDEO OF THE SEMINAR HERE

MARKTOMARKET

MarktoMarket collects rich data on private businesses, particularly in the small and mid-market. Our easily searchable database allows our advisory, private equity and corporate customers to identify, analyse and price investments and monitor market trends to create their own content.

MarktoMarket’s auditable data gives users the confidence that they are dealing with intelligence that can be trusted.

To continue the discussions about how data can support your business, contact Olga Melnyk at olga@marktomarket.io.