Round table: M&A – the market is gaining momentum

Our latest round table looked back at the deals market during the pandemic and asked: what has been learned by sellers, vendors – and advisers. Here’s what we learned…


Steve Armstrong, Shawbrook
Tom Gray, Phenna Group
Harry Walker, FRP Advisory
Jahid Ali, Howes Percival
Glynis Wright, Nelsons
David Bains, LDC

How has the deals market performed over the last two years?

Harry Walker: The last two years have been an interesting time. The market was well-placed at beginning of 2020 – by the end of March that year everything had gone on hold.

By March 2021, the Capital Gains Tax changes livened the market up. The last few months has seen a slight slowdown, post-Christmas, but I think the deals market is gaining momentum.

David Bains: I think back then we had to build confidence that world wasn’t going to end. However, 2021 was a record year for us. I’m feeling relatively positive about the next 12 months.

Tom Gray: We’ve got 26 businesses in our group, and they operate in diverse sectors. I see a healthy deals market continuing.

Steve Armstrong: At the beginning of 2020 we didn’t miss a beat, we got deals done, but come June 2020 it became obvious that what had happened was that the lead flow had slowed down. 2021 was bonkers, it was record year for us. The rules around Capital Gains Tax created a frenzy. This year has been slightly strange.

Jahid Ali: Back in March 2020, almost overnight it was like we had no work to do. But by June/July of that year it came back. I think people thought: we can’t just sit on our backside for years – we’ve got got to carry on. By the end of 2020 and the beginning of 2021 we were busy again and we had a stonking 2021.

Glynis Wright: Back then, Knights came into Leicester after buying Spearing Waite. I wasn’t necessarily seriously looking to to sell but I started scrutinising the market to see if a regional player was looking for a bolt-on acquisition. When I looked into it properly, it became not about dipping a toe in, but biting whole foot off. However, just at the point we were getting there, we went into lockdown. I had the challenge of getting staff remote in a couple of days. Nelsons, who I had been in negotiations with, phoned up and said: the negotiations are off. I didn’t know what this meant for my law firm. However, as we went on, Nelsons came back – it was a real rollercoaster.

Are you all seeing more distressed companies up for sale?

Armstrong: I have to say that we’re not seeing many. CBILs loans have propped a lot of companies up.

Walker: It’s been rather counterintuitive because of government support. I’d say there has been around half the number of normal administrations going on. However, I do think there will be lot of opportunities in this space as we go through the next 12 months.

Armstrong: I think we’re starting to see more stressed – rather than distressed – companies.

As a business owner, how long did it take you to decide to enter the acquisition/sale process?

Gray: We’re doing a volume of deals. We did 14 deals last year. We have a pipeline and we can’t afford to let things run on as things will back up.

What should be at the forefront of the mind of anyone buying or selling a business?.

Walker: I meet a lot of prospective vendors who have a round number in their head. However, I think if they need to get right sort of advisers around them. It’s just as important to think about how you want that business to look like in the future. Do you want a big lump sum of money, or do you want to spend more time with your family – it all depends on priorities.

Armstrong: I agree with Harry totally; you can’t underestimate how important it is to get the right advisers.

Wright:  It’s also very important to get the right buyer. As a vendor, you feel a sense of responsibility for your team. I had to tell my staff I was selling via Zoom during a pandemic. I chose for me what I thought was right byer. My people were pleased with our buyer, however.

Ali: For a lot of sellers out there, the number is a lower priority than the culture of the firm they leave behind. There is education to be done around opening people’s eyes to the opportunities out there.

Bains: For us, it’s getting in the room to start with. A lot of people still don’t understand private equity. Nottingham has got it, but many others in the East Midlands still struggle.

Gray: From a buyer’s perspective, it’s all about understanding the seller’s needs. Most of the companies we’ve bought, we’ve been working together over a number of years. It’s been much easier to put a deal together on that basis.

Ali: My advice would be to engage advisers early – don’t wait until the last minute. Plan a couple of years ahead and treat it as a journey.

Many thanks to Cartwright Communications for hosting.

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