PKF Francis Clark bucks M&A trend

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PKF Francis Clark has retained its position as the most active dealmaker in the south west financial adviser table with eight transactions, compared to six in the same quarter last year.

The latest set of figures from Experian MarketIQ show the total value of the UK’s mergers and acquisitions market was on the up in the first quarter of 2018 even as the overall number of deals receded.

In the UK there were just 1,423 deals announced in Q1, a decline of 26% from the 1,910 transactions recorded during the first quarter of 2017. This was the slowest start to a year since 2013.

In the south west, the national trend was intensified with 80 M&A and ECM transactions announced in the region so far this year, a decline of almost 50% on the 157 deals recorded during Q1 2017.  The report does, however, highlight that Q1 deals in particular are often reported some time after their completion date, and anticipates that the figure will rise following publication of the report.

The south west saw deal values increasing compared to the last quarter of 2017 (up by 2.7%) but the comparison to Q1 2017 is substantially worse with a 71% decline, from £2.3 billion to £683 million. In comparison, since the beginning of 2014, the average quarterly value of south west deals is £1.8 billion. South west deals accounted for 5.6% and 1% of the overall UK’s volumes and values, respectively.

The report highlights a change of industry focus for the south west, with manufacturing dropping to second position behind professional services with 44% of the transactions; in total 35 deals worth £346 million. The values of transactions in the manufacturing sector remained strong despite the drop in volumes, with a total value of £360 million for the quarter.

Andrew Killick, head of corporate finance at PKF Francis Clark, said: “Having had an extremely busy year in 2017, its pleasing to see that despite increased market uncertainty, our corporate finance team continues to carry out a market-leading number of transactions helping entrepreneurs and business owners achieve their aspirations.

“The market is showing signs of a divergence of confidence with some funders showing more caution, whereas certain entrepreneurs are taking a more bullish approach and making the most of the wide availability of low- cost money and progressing with acquisition plans.”