International M&A Review: October 2017

United Kingdom

UK companies were involved in 463 M&A and ECM transactions in October. This represented a welcome month on month upturn of just under 10%, with figures boosted by strong activity in the small and mid-market deal categories; activity here was up 8% and 29%, respectively. However, overall deal making remains subdued in the UK in comparison with the highs we have become accustomed to over the last couple of years, and October’s return was down by 28% from the 640 deals carried out in October 2016. Meanwhile the total value of October’s deals reached just £15bn, some way down on 2017’s monthly average of £22bn and a big drop of 72% on the £55bn worth of deals recorded during October 2016

Acquisitions dominated October’s deal landscape, accounting for 46% of all deals. Within this category, there were 63 deals where a UK firm was acquired from overseas, accounting for just under 30% of all acquisitive transactions. The US was most active in the UK with 21 deals in October, many of which took place in the mid- market tech and software sector. Meanwhile the month’s largest M&A transactions stemmed from the Far East and South Africa. First, Global Logistic Properties of Singapore, an owner, manager and lessor of logistics facilities in China, Japan and Brazil, acquired London- based distribution specialist Gazeley Ltd in a £2bn deal, the latest of a spate of high profile deals in the logistics space. Gazeley was previously acquired by Canadian firm Brookfield Asset Management from Dubai investors in 2013.

Elsewhere, Johannesburg banking group FirstRand made a £1.1bn offer to acquire Aldermore, a provider of specialised lending services to SMEs and homeowners and City Developments Ltd, Singapore, an international property and hotel conglomerate, announced an offer to acquire the remaining 34.8% stake in Surrey hotels group Millennium & Copthorne Hotels for a consideration of £624m. Meanwhile Arqiva Group Ltd, provider of communications infrastructure, television and radio transmission services, announced its intention to proceed with an initial public offering to raise around £1.5bn – this would have been amongst the largest London flotations in what has been a strong year for the IPO market, had it not been later postponed due to market uncertainty.

Food manufacturing group Bakkavor’s listing was also prominently shelved at the end of October, although the firm did subsequently resurrect its plans.

Eversheds Sutherland was October’s busiest legal adviser by deal volume, working on ten deals in total, while AIM advisers Numis and Finncap topped the financial adviser list, each also on ten.

Source: Experian Business Research: October 2017

James Ison, Senior Economist