Corporate Buyers More Likely to Acquire Businesses Than Financial Buyers
Corporate buyers have become the most common acquirers of high-growth companies in the UK, more so than financial institutions. This trend reflects strategic acquisitions by businesses looking to broaden their market presence, provide more varied service offerings, or gain a competitive edge by acquiring innovative businesses.
Once again, 2021 saw the number of acquisitions by both corporate and financial buyers reach its peak, reflecting the figures from 2020. Although these figures have dipped recently, they may still exceed pre-pandemic levels.
2021 was an excellent year for acquisitions and IPOs, reflecting increased exit activity from all company stages, but particularly from established businesses. Although 2022 saw high acquisition activity, the data from the first half of 2023 indicates that acquisition numbers will most likely return to pre-pandemic levels.
The data shows that while exit activity has slowed since 2021 and 2022, companies are still utilising acquisition as an exit method at similar levels to 2018 and 2019.
However, public markets paint a different picture, with IPO activity for high-growth companies at a decade low.
While trends in the exit market change due to macroeconomic factors, it will always be vital to have a succession plan or exit strategy in place, and acquisition can be an effective strategy for encouraging growth.
GS Verde Group can assist on every aspect of both types of business transaction, from structuring deals to carrying out due diligence. Our multidiscipline team combines corporate finance, law, tax, and communications support for a streamlined, end-to-end service.
To learn more about how we can support you through the M&A process, visit our Sell A Business page or Share Your Acquisition Criteria with us today.