M&A Outlook Buoyant for Businesses in 2024

January 16, 2024

By Rich Craven

The UK mergers and acquisitions market in 2023 showed a continued weariness from the previous year, hindered further by external geopolitical factors and a tightened economic landscape.

However, in spite of the uncertainty continuing into 2024 presents, the M&A market appears to be ready for a return to form and things are looking buoyant for those looking to buy or sell a business in 2024.

M&A transactions were slow generally across the UK in 2023, with the average number of deals completing per month across the year declining. However, M&A activity for deals involving smaller businesses provided some stability for the rest of the market. Moreover, Wales continued to see an increase in the overall number of M&A transactions completed year on year, a relative success story as the only market region in the UK to do this.

Looking back on 2023 trends

Although business deals worth £25 million or less were down 14 per cent in terms of both total value and volume in the first three quarters of the year compared to 2022, the UK’s entire M&A activity in the same period declined 19 per cent in volume and 29 per cent in value. Therefore, transactions at the lower end of the market held up better than the sector as a whole.

Smaller business acquisitions with a history of proving its resilience during fairly turbulent conditions can we attractive to prospective buyers.

Business leaders are also recognising the gains their organisation can achieve by consolidating their market share with adjacent acquisitions. Organic business growth has been hampered by an interest and inflation-high economy and a cost-conscious consumer market; a business acquisition can offer a suitable alternative to grow.

M&A Activity in Wales

Whilst Wales saw a significant drop in the total value of deals completing in the first three quarters of 2023, this was largely impacted by having one £100 million deal during that period.  However, the total number of M&A transactions which completed in that period increased to 199. In particular, the Welsh technology sector continues to flourish, with both transaction volume and value increasing significantly – a 30% increase in deals and over 100% increase in value.

Wales is demonstrating its continued growing activity for SME M&A, and 2024 looks to offer the opportunity to keep this trend going.

Outlook for M&A in 2024

A recent survey conducted by Marktlink of over 1,000 SME owners showed a growing interest in making an acquisition for their business. Coupling this with a projected stronger finish to the M&A market for 2023, 2024 appears to have the foundation ready for activity in the M&A market to grow.

As for the funders, some are now casting an eye towards the small business market for the next potential acquisition to help fund, with significant cash reserves in the waiting which have not been deployed for larger M&A deals. The prospect of buying and selling a business in 2024, especially for small business owners in Wales, looks to be the busiest it has been for some time.

Thinking of buying or selling a business?

If you are planning to buy or sell a business in 2024, please contact one of our corporate law solicitors, Rich Craven via email on rcraven@darwingray.com or via telephone on 029 2082 9130 for a free initial chat to see how we can help you.

M&A transaction statistics provided by Experian MarketIQ: YTD 2023 report.

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