Predictions for 2017: Expect a slowdown says corporate partner at Squire Patton Boggs

Richard Hunt is a corporate partner at law firm Squire Patton Boggs in Leeds. Here he discusses the buoyant market in 2016 and the potential threat the Brexit decision and new US president could bring to 2017.

What have been the biggest changes in your industry for 2016?

Great businesses came to the market in 2016, confident of achieving the best possible pricing. Sellers were generally more prepared prior to commending processes and consequently we saw many more deals complete according to plan and maintain value throughout the process.

International appetite for UK assets remained strong this year and this has been a key feature of a number of transactions that we have been involved with. The outcome of the Brexit vote, and the impact this had on sterling, served to make UK assets more attractive to overseas buyers from a pricing perspective and we expect that trend to continue into the first quarter of 2017.

There has been a real confidence that deals will complete in the last 12 months, with very few deals stalling or aborting. Initially Brexit caused a pause in certain sectors, but the deal market has responded well and remains resilient. We are not seeing any lack of good quality businesses coming to market and anticipate this to continue early in 2017.

What has been your highlight for the year?

A personal highlight was acting for new client Imperial Mobility International B.V., a wholly-owned subsidiary of JSE-listed, South African-based Imperial Holdings, on the £162.9m acquisition of Palletways Group. It was pleasing to successfully manage this cross border transaction from Leeds; a transaction that was of real strategic importance to Imperial.

What will be the biggest changes in your industry in 2017 and anything to watch out for in terms of market trends?

The outcome of the US election will have an impact on the confidence and approach of US acquirers and may result in less US purchasers acquiring UK assets.

However, this could be balanced by the continuing impact of Brexit on the strength of sterling which should ensure the continued appetite of international acquirers, whether they are trade buyers or private equity from overseas, as UK assets remain cheaper than they were at the beginning of 2016.

The manner in which Brexit will be triggered will be a major focus in the first half of 2017 and will have an impact on the confidence of buyers and sellers in the transactional market. We anticipate that transaction volumes will be less than in 2016 as a result of the uncertainty in the US and UK.