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July 2020 Valuation Barometer - Deal volumes and valuations in June 2020

For the full report please email doug@marktomarket.io

Based on deal intelligence in June 2020 relative to the prior two months, MarktoMarket’s data is indicating the start of a recovery in M&A activity. UK M&A deal completions increased to 211 which, whilst still subdued relative to pre-COVID levels, provides an encouraging uplift to the May total of 155*.

Whilst no single transaction could match May’s £12 billion O2/Virgin Media merger, June did provide its own headline-grabbing deals, such as the $5 billion acquisition of BP’s petrochemicals business by INEOS and the takeover of US-based Grubhub by FTSE100-constituent Just Eat for $7.3 billion.

There was also an upturn in takeover approaches for UK-listed businesses – marketing services provider BeHeard Group plc was the subject of a recommended offer by LDC-backed MSQ Partners; Share plc, holding company for retail stockbroker The Share Centre, agreed a deal with Antler, the owner of Interactive Investor; and Indigovision Group plc concluded its sale to Motorola.  Additionally, Petra Diamonds, the small-cap listed mining group, announced a formal sale process, driven by a looming deadline for repayment of loan notes totalling $650 million; and Best of the Best, the luxury car competition provider, announced the receipt of expressions of interest from prospective buyers.

As well as BP’s divestment of its petrochemicals business, June witnessed other plcs exiting non-core assets – Interserve sold its Facilities Management business; Tesco disposed of its Polish operations; and Lloyds Bank completed the sale of its Channel Islands Wealth Management activities. Capita plc also announced an asset disposal plan, which will focus on divesting software assets that have little overlap or cross-sell opportunity with the rest of the group.

We were also encouraged to see the return of private equity activity. Notable deals include Inflexion’s acquisition of Rosemount Pharmaceuticals for £156 million. Inflexion was also in action on the sell-side, exiting fibre network provider Glide to Alinda Capital Partners, a US infrastructure investor, in a £200 million deal. Another US investor, Pine Island Capital Partners, acquired Meggitt Training Systems, which supplies live fire and weapons simulation training systems, for $146 million.  Further down the size spectrum, RJD Partners completed the acquisition of Improve International, a provider of continuing professional development (CPD) courses for veterinary professionals for £12.5 million.

For the full report please email doug@marktomarket.io