Abu was recently asked to contribute to the Insider Dealmakers Roundtable which featured a group of financial services experts – all winners or shortlisted companies from the recent Insider North East Dealmakers Awards – who explained how the deals market has reacted to the last 20 months, outlined how they are shaping their offering to provide added value to their clients, and discussed how North East business leaders can plan for growth and (potentially) prepare for sale or begin the acquisition trail.
Here’s what he had to say:
More and faster deals
“We did our buyout just as the first lockdown happened but we still made the decision to go ahead, thinking the pandemic wouldn’t last very long. But this has actually worked out brilliantly for us, after a period where our pipeline disappeared at the end of March, deals were quickly back again and more than half the transactions we completed were done within six months. This activity came back in a much faster, aggressive fashion, driven by certain sectors which has brought the entire market along, even those sectors that were struggling like leisure and home care. The funding sector really stepped up very quickly and put a lot of liquidity into the marketing and this has encouraged growth, which gave entrepreneurs an opportunity on which they capitalised.”
A perfect storm
“All this activity doesn’t look like slowing down, we’re very optimistic for the year ahead. After the challenges of the last few years, with COVID and Brexit, there was a bottleneck of transactions but there’s been a lot of fundraising work and, together with a lot of debt and equity in the market, which has driven things forward. I think that it’s almost a perfect storm – we’re seeing more volume than we ever have and we’re also seeing a variety of transactions. It’ll be interesting to see how we transact with the smaller owner-managed SME businesses – those that don’t have the data analytics. And there are a lot of these types of business in the region, we can’t ignore them.”
Corporate finance resources
“I think the 2008 financial crisis created the start of the supply shortage that we’re now seeing in corporate finance as there aren’t the amount of people being trained in corporate finance. And this has culminated in a huge lack of resources within corporate finance firms – there are fewer advisers that are working on an increased number of deals.”