United Kingdom M&A Review: 2017

In total, there were 7,046 transactions announced last year, down by 5.5% on the 7,489 deals recorded in 2016. This overall decline was primarily due to a slowdown in the mid-market, which 2017 saw volumes fall by 14% compared to 2016’s return, but other value segments saw the number of transactions increase; small deals were up 0.1%, large deals by 2.7% and ‘mega’, £1bn plus deals up by some 33%. Meanwhile, the total value of UK M&A reached £270bn; again, a small decline from 2016’s figures (when £289bn worth of deals were recorded).

Deals stemming from the UK’s fertile financial sector saw a 9% increase in transaction volume in 2017, accounting for 29% of all UK activity. Aside from large numbers of smaller, on-market transactions, deals here included several multi-billion deals in the rapidly growing online payments space. In one of the year’s biggest, the UK’s largest payment processing business Worldpay was acquired by US rival Vantiv for £9.3bn in cash and shares, while elsewhere private equity firms CVC and Blackstone teamed up to acquire Paysafe, a payments and money transfer firm, for £3bn.

Away from fintech, notable deals saw the Aberdeen Asset Management /Standard Life merger create a fund management giant and a consortium led by private equity firm Macquarie bought out UK Green Investment Bank Plc, an investor in sustainable energy projects, from the UK Government for £2.3bn. Manufacturing was the UK’s second most active sector, although deal volume here was down by almost 17% when compared to 2016’s return, followed by infocomms and professional services. Real estate and construction saw significant value growth, with total consideration up by 74% and 59% respectively, year on year.

In terms of deal type, trade acquisitions continued to provide the major part of the UK’s deal making in 2017, accounting for just under half of all transactions. There was a significant jump in of publicly-traded firms looking to raise funds on the markets, with a 33% increase in the number of rights issue transactions year on year, and IPOs were also on the up. Meanwhile there was a 13% increase in the number of investor buy-outs, with their associated value jumping by a substantial 91%, as private equity firms became increasingly active on the buy-side. However, the volume of early-stage venture capital investments receded slightly in 2017 (to 1,090, down from 1,239 in 2016).

Source: Experian Business Information: January 2018

Jane Turner, Research Manager