General Election 2015: Deals activity picks up as vote draws nearer

DEALS activity in the West Midlands has increased significantly in the run-up to the General Election as businesses have brought forward their succession plans, corporate finance analysts at Clement Keys have said.
 
The firm said the increase in activity was partly due to family businesses being concerned about what might happen to Entrepreneur’s Relief if there is a change of Government or if current leaders decide to amend it in future.

Ross Cocker, corporate finance partner at Clement Keys, said: “Over the last month or so, clients and other business contacts have been asking more questions about how to get deals over the line ahead of the General Election and interest in doing deals is higher than it has been for some time.
 
“While newcomers to the table may not be able to achieve the necessary clearances in time to achieve pre-election completion, they are still interested in completing the deal as quickly as possible. Other deals, some of which have been in the pipeline for some time, have picked up pace and have either completed or are close to completion as a result.”
 
According to Clement Keys, mention of Entrepreneur’s Relief in the Budget Statement has set hares racing amid speculation that the current legislation, which has been in place for some time, could be amended potentially making the relief less attractive among family businesses where owners are seeking an exit on a deferred consideration basis.  

“There is no reason to think that Entrepreneur’s Relief is going to be at risk any time soon,” added Cocker.

“However, we are finding that family businesses with succession plans in place are choosing to act now rather than wait to see what might happen in the future. The uncertain political and economic environment is adding to the sense of cautiousness.”
 
He said there had also been an upturn in M&A activity more generally in recent months, driven by high levels of corporate cash and low interest rates, and a growing number of businesses in the region are pursuing strategies of growth by acquisition.

Nevertheless, Cocker said access to funding remained a sticking point.

“While there is more M&A activity, many businesses in the region remain reluctant to over gear in order to fund growth strategies and they are taking a more cautious approach than they would have prior to the recession,” he said.