M&A activity has remained incredibly buoyant in 2021. As we look ahead to the coming year, this trend is only set to continue. A recent survey carried out by Ansarada of certain investment banks, PE houses and law firms found that 90 per cent of dealmakers expect an increase in new deals within the next twelve months, while 54 per cent expect this increase to be “significant”.
In addition, given that Capital Gains Tax is unlikely to be substantially increased in the medium-term, many business owners looking to sell may wish to take advantage of this by seeking to realise assets sooner rather than later.
While sustained levels of M&A activity are to be welcomed for many reasons, we would urge clients not to get caught up in the “feeding frenzy” of activity. For those looking to sell or secure investment, it is crucial that the board is clear on their business model and growth strategy; and from a legal perspective, that their “corporate” house is in order.
For those looking to acquire, with so much choice available and the market moving fairly rapidly, it is equally important that buyers take the time to conduct proper due diligence and ensure that everything is as it seems with the relevant targets and that there is a proper integration plan to ensure long-term success.
