As the weather gets warmer it seems that the economic climate is improving conditions for business growth. Recent reports indicate that the recovery is well under way and that mergers and acquisitions activity is on the rise.
The CBI reported ‘solid growth’ of 0.7 per cent in the first quarter of 2015 and Deloitte reports deal values 8% higher than for the first quarter of 2014 in the Deloitte M&A Index H1 2015.
Other key trends identified by Deloitte in their report, which can be downloaded here, include:
- Europe is emerging as the preferred target for inbound acquisitions, with one in four dollars spent on European M&A coming from the US or Asia;
- the weakening of the euro against the dollar is improving the attractiveness of European acquisition targets;
- organic revenue growth is hard to realise following the end of quantitative easing and so Deloitte predict that companies will increasingly need to pursue mergers and acquisitions to achieve growth;
- Chinese company investment in Europe tripled to reach $13.5 billion in 2014, with investment in consumer businesses and technology overtaking manufacturing; and
- significant consolidation predicted in the mobile telecoms sector, particularly growth in acquisitions for the Internet of things.
Acquisition strategy and due diligence
If your growth strategy is based on an acquisition, then the team at Artington Legal can help you in a number of ways:
- strategic advice;
- preparing and negotiating heads of terms;
- due diligence;
- sealing the deal; and
- integrating legal issues post acquisition.
Preparing for merger or sale
On the other hand, if you are looking to attract an investor, a merger partner or want to start thinking about your exit, then you need to ensure that your business is in prime condition to attract attention and interest. An important part of grooming your business is to ensure that all your business assets are protected – this includes your sales contracts, your key personnel and your intellectual property. Failure to secure any of these could have a detrimental impact on the value of your business to a third party.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.