PE Tech Report

NEWSLETTER

Like this article?

Sign up to our free newsletter

European mid-market M&A still going strong, says Baird

In spite of the ongoing economic turmoil, merger and acquisition activity across Europe and to a greater extent in the UK has remained surprisingly robust for the first quarter of this yea

In spite of the ongoing economic turmoil, merger and acquisition activity across Europe and to a greater extent in the UK has remained surprisingly robust for the first quarter of this year, according to Baird, a middle-market investment bank based in Milwaukee, Wisconsin.

The firm’s statistics indicates relative resilience in the middle market, particularly at the lower end. In the first quarter there were 367 disclosed deals with a value of less than GBP500m in the UK, compared with 432 a year earlier – a decline of just 15 per cent from the highly buoyant first quarter of 2007.

While the total value of deals fell 37 per cent from GBP19.2bn to GBP12.1bn, the smaller decline in volumes indicates that the lower end of the mid-market has been relatively busy. In Europe there were 714 deals worth less than GBP500m, compared with 1,160 in the first quarter period of 2007, a decline of 38 per cent. This more significant drop is directly reflected in the value of the deals, which also fell by 38 per cent, from GBP54.6bn to GBP33.8bn.

The number of European deals worth between GBP250m and GBP500m fell from 53 to 32 and their combined value dropped 43 per cent, from GBP18.9bn to GBP10.86bn. The number of UK deals in that bracket plummeted from 20 to eight, and their value was down 61 per cent from GBP7.43bn to GBP2.93bn.

At the lower end of the mid-market, total deal value in the bracket between GBP50m and GBP250m space stood at GBP5.83bn in the UK, down from GBP7.82bn in the first quarter of 2007, while in aggregate Europe deal value dropped from GBP25.36bn to GBP16.5bn. Deal numbers declined by just 18 per cent in the UK, from 66 to 54 this year, while in Europe deal volume fell 30 per cent from 209 to 146.

According to Baird, these figures indicate the relative robustness of smaller deals in the UK against a background of greater weakness across the European market as a whole. Given the contrast between the height of the market in the first quarter of 2007 and the aftermath of the credit crunch a year later, the firm says the figures are ‘far from alarming’ when activity is at worst continuing at 70 per cent of its previous pace.

Like this article? Sign up to our free newsletter

MOST POPULAR

FURTHER READING

Featured