Article 50 could spark deals rush, says EY
EY’s Midlands Transaction Advisory Services team has advised on the completion of 12 deals over the past three months, and predicts that the regional M&A market could see a higher number of transactions in early 2017 compared with previous years as companies look to transact ahead of the UK Government’s deadline to trigger Article 50 in March.
EY provided a range of due diligence, corporate finance and other associated services in the last few weeks on the following transactions; Macquarie Infrastructure acquiring a 61% stake in National Grid’s UK gas distribution business for £5.4bn, US-based Safariland’s acquisition of Aegis Engineering Limited and LBA International Limited, the sale of United Asphalt to FM Conway and sale of a transport and logistics business to a US backed trade buyer for $110m.
Neil Meredith, corporate finance partner at EY in the Midlands, said: “These completions reflect a very busy period for our team over the last few months. During this period we’ve seen the highest level of activity in the transactions market for a number of years.
“Mid-market private equity firms remain keen to transact as they have significant funds to deploy. Also, we’ve seen a lot of inbound investment activity following the EU referendum, partly reflecting currency movements and the attractiveness of the UK to overseas buyers, both factors driving investment across the Midlands.
“We feel very positive about the deals environment in the first half of 2017, and are actively growing our team to take advantage of our strong pipeline.”
John Houlden, transaction advisory aervices partner at EY in the Midlands believes that clarity around the UK’s negotiating position following the Prime Minister’s recent speech will lead to higher deal volumes in the first half of 2017 than in previous years.
Houlden commented: “What we’ve seen over the past few months is an uptick in transactions, which suggests that UK businesses continue to be a target for overseas buyers and domestic investors are keen to complete transactions.
“Following the UK’s decision to leave the European Union, businesses will face greater uncertainty as we get closer to agreeing a Brexit plan. This has created a window of opportunity and an environment conducive to doing transactions as companies seek to benefit from pre-Brexit market conditions.”
