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September 2020 Valuation Barometer

Category: Market Report

Overview

Highlights from our September Valuation Barometer, covering deals and valuation multiples in UK M&A from August 2020. To access the full report with deal tables and multiples, submit a request via our Data Co-Operative.

Highlights

  • August volumes were down on July, breaking the post-COVID recovery that began in June, with 232 transactions recorded versus 271 in July.
  • However, we would expect to see a drop-off in completions during the August holiday season and the 14% fall month-on-month this year was similar to 2019.
  • We calculated that deals valued at a total of £8.2 billion were executed or announced during the month. This was down 57% on the July 2020 total of £18.9 billion.

Spotlight Transactions

  • AVEVA’s takeover bid for its US rival OSIsoft in a $5 billion deal.
  • Advent International’s acquisition of Hermes UK for €1 billion.
  • The merger of SDL plc and RWS Holdings, which values SDL at £854 million.
  • The acquisition of Ryan Reynolds backed Aviation Gin by Diageo for $610 million.

Deal Commentary

Some standout deals completed in the consumer space and provided further evidence of the mixed fortunes of retail. Sofa.com, hailed as a new model for retailing soft furnishings, with its format of predominantly online sales supported by a small number of ‘showroom-style’ outlets, was bought by Fraser’s Group in a distressed deal. Losses had accelerated under previous owners CBPE Capital and problems were exacerbated when House of Fraser, a key distribution channel, fell into administration.

Whilst Sofa.com attempts a comeback, Gymshark, the fitness brand, continued its extraordinary progress, with the sale of a 20% stake confirming its status as a Sterling unicorn, a feat that has been achieved without raising a penny of external capital. The brand’s direct-to consumer, online-only model uses athletes as influencers at the core of a brilliant social media strategy.

Some of the UK’s leading software companies had a busy month. AVEVA, a leading industrial software provider, is in talks to acquire OSIsoft, a US peer, in a $5 billion deal. OSIsoft is backed by Japan’s SoftBank, which also owns ARM, AVEVA’s Cambridge neighbour; ARM is also rumoured to be up for sale [confirmed September 2020] as Softbank consolidates its portfolio in the wake of its pulled IPO of WeWork, another high-profile holding of the conglomerate. Craneware, the US hospital software provider, has decided to pursue acquisition-led growth, having followed a broadly organic strategy since its inception. However, its first material deal didn’t go to plan and was aborted after the target agreed terms with a third party at the eleventh hour.

Access to the full list of deals in the September Valuation Barometer is reserved for members of the MarktoMarket Data Co-operative. 

For the full list of previous 2020 Barometers – visit our reports page.