The Technology M&A Review, Third Edition: United Kingdom
In keeping with broader trends in UK M&A, following a hiatus in deal activity in Q2 2020 as sponsors and corporates consolidated their portfolio positions following the onset of the covid-19 pandemic, H2 2020 was a story of pronounced activity in the UK market as sponsors in particular drove record-breaking levels of activity. Several factors underpinned this resurgence: (1) a strong sellers’ market preceding the pandemic returned after what proved to be a temporary dislocation; (2) the sheer level of capital raised by buy-out funds prompted many sellers to bring assets back to market in Q3 and drove further consolidation across Q4 as managers sought to put capital to work; (3) ultra-low interest rates, continued quantitative easing by central banks and a willingness in the debt markets to fund transactions complemented availability of proprietary capital. The role of credit funds (which were not significant participants in the debt markets during the global financial crisis) cannot be understated in this respect; and (4) a prevailing view that certain sectors would recover swiftly from the effects of the pandemic and therefore represent attractive investment opportunities.
Reproduced with permission from Law Business Research Ltd
This article was first published in October 2022
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