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Businesses still buying after post-Brexit vote blip

PUBLISHED: 11:52 18 October 2016 | UPDATED: 11:52 18 October 2016

PricewaterhouseCoopers' Stephen Hart.

PricewaterhouseCoopers' Stephen Hart.

PricewaterhouseCoopers

Despite an initial blip after the EU referendum result, merger and acquisition (M&A) activity has increased in the region, according to a leading firm of business advisers.

The market has been active over the last 18 months with a number of large-scale, cross-border transactions in the technology sector, according PricewaterhouseCoopers (PwC) analysis.

Despite this there has

been a slight drop in the volume of small deals but mid-market transactions are up by 21%.

Stephen Hart, PwC’s east deals leader, said: “After a short hiatus in early July while businesses considered the impact of the EU referendum, M&A activity appears to be back on track.

“Appetite for deals is back and, importantly, the debt markets are open – meaning so too is access to funding.

“There is undoubtedly uncertainty ahead for the UK, but business is not being paralysed by the fear of the unknown.

“This is encouraging, as we need the economy to be as confident and buoyant

as possible as the UK prepares to enter trade negotiations.”

Figures, from the Experian half yearly report show the number of small deals in the region, valued at between £0.5m and £10m, saw a slight decline year-on-year dropping by seven to 69.

The volume of mid-market transactions, from £10m to £100m, increased by 21%, from 38 to 46 for the first half of the year, compared to 2015.

Despite economic uncertainty, Mr Hart said he believed the future for the deals market in the east remained positive.

He said: “Right now, the UK is particularly attractive to overseas investors due to the weak sterling.

“We also are seeing that private equity firms have record levels of capital to invest. These two factors

will help to overcome the longer-term disruptive effect the EU referendum result may have.”

Big deals which have taken place in East Anglia include Japan’s Softbank buying ARM Holdings for £24bn, Sepura’s acquisition of Spanish Teltronic for more than £90m and the sale of Autonomy as part of HP Enterprise’s $8.8bn ‘spin-merger’ with MicroFocus.

Has your business been affected by the devaluation of the pound? Email doug.faulkner@archant.co.uk

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