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The first Labour Budget in 14 years is still a few weeks' away and there is some concern around the corporate finance community that there is little point starting a marketing exercise for a buyer or a target this month now, until the Chancellor's policies are announced.
However, corporate financiers and corporate lawyers already have a deluge of work, not least around EOTs and others transactions where parties want to complete before 30th October. There will be some frantic hours worked in the days leading up to that date.
Expectations are that the Government will veer towards supporting those businesses who are aiming for green credentials and this is likely to have a continued focus in M&A over the coming years. According to BDO’s latest Manufacturing Deals Review, in 2023, manufacturing saw a 25% increase in circular economy deal volumes, combined with the total deal value soaring to over £400 million of invested capital. The average disclosed deal size increased from £6.7 million to £12.2 million.
And a BDO/Make UK survey of more than 200 SMEs in the sector showed that "40% of respondents believe that operating a circular business model will be more profitable than a linear model, suggesting an increase in manufacturers’ understanding of the economic benefits of circularity. The survey also showed that more than half of businesses (56%) plan to make circular changes in the next three years, with nearly a third (32%) stating that circular or sustainability credentials differentiate them from their competitors." It follows that this will also be the case for those companies competing with others for the attention from an acquirer, not only from customers.
Inside this issue.
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