How Corbett Keeling is helping UK bosses navigate a busy M&A market – and fulfil their dreams
Like all markets, mergers and acquisitions will have its good days and bad days. And, depending on what side of the deal you are on, that could mean one of two things: there is an abundance of sellers – meaning prices will fall – or there is an abundance of buyers – meaning the price will go up. Usually, someone wins and someone loses.
According to Emma Keeling, Chief Operating Officer at Corbett Keeling, an independent firm with a strong focus on selling UK privately-owned companies, what we are seeing now is highly unusual.
“The M&A market we have right now has probably only happened a couple of times over the past 30 years. There are plenty of both sellers and buyers which is cancelling out any advantage the other side may have, but it is making for an extremely busy time.”
Corbett Keeling has been going for 30 years, initially set up by Jim Keeling, whose father and grandfather worked in the same industry. They have an industry-high figure of a 90% deal completion rate with 45% average uplift in sale value. They are well placed to talk about the current M&A climate.
Emma explained the reason why there is so much money around for deals at the moment. “The period leading into the pandemic was relatively quiet in the M&A world, then the pandemic hit, Private Equity firms hesitated, both here and abroad, and held money they would have otherwise spent, looking to see how things would pan out.
“Business owners spent their time trying to navigate the fluctuations in their specific sectors as lockdowns came and went, supply chains got blocked and rules on what we could and couldn’t do changed.
“As we came out of the pandemic, the Private Equity firms had a war chest that was unusually full with investors actively looking to spend money and business owners thinking about selling.”
In 2021 Globalscope, a global group which Corbett Keeling is part of, was involved in selling companies to the tune of more than $8 billion across 226 transactions. That is more than an average of four deals every week and Emma does not see that high rate of sales stopping any time soon.
A recent survey Corbett Keeling conducted of leading Private Equity firms in the UK found that they had billions still to spend. What has made this the perfect storm is that many business owners, having got through the pandemic, have had enough of struggling through and do not want to have to deal with another crisis so are looking to sell, while others have brought forward retirement plans by up to ten years due to the interest – and the price they can now get for their business.
Their appetite to have to negotiate another global disaster, or deal with more supply chain issues – whether that is because of a ship stuck in the Suez Canal or a pandemic, has gone.
Emma added: “At Corbett Keeling, we will only take on a handful of deals each year. This is not because the work is not there, but because we offer a bespoke service. We will sit with you to understand what it is you need and when you need it by.
“There are plenty of issues that we have seen that you may not even have thought about – staff, infrastructure, handover period, introductions, earnouts – the list goes on. But a buyer will want everything sorted before they part with their money and we make sure every single “i” is dotted and every “t” crossed.
“Business owners have realised they are not mortal, have been through the pandemic and they have started to think ‘do I want to go through this again’. If they were thinking of selling in three to five years, they have brought that process forward so they can make the most of life.”
Corbett Keeling, which will deal with businesses worth £10m – £200m has found that there is no particular sector that is hotter than any other at the moment, they are all seeing a huge uptick in businesses for sale. Private Equity companies, both within the UK and abroad, have billions to spend, as have big trade buyers.
Brexit may have worked in favour of sellers as buyers from abroad want to have a business that is based in Britain and Corbett Keeling is seeing increased interest from Europe and North America.
Harry Knight, Corporate Finance Director, at Corbett Keeling, said: “The cost of living is, without a doubt, rising and, with interest rates going up, you would think this would dampen the market. But we are not seeing a slow down as yet, quite the opposite but who knows how long this will last for if inflation continues to rise.”
While the market is hot, it is tempting for business owners to try to find a buyer, but Emma urges caution. “Often, a seller will have worked for years building up their business, will have staff and clients who have become friends, and selling can fracture these relationships if not handled properly. Whenever you decide to sell, please make sure that you tread carefully and take expert advice.”
“What has made this the perfect storm is that MANY business owners, having got through the pandemic, have either had enough of struggling through and do not want to have to deal with another crisis so are looking to sell, while others have brought forward retirement plans by up to ten years due to the interest – and the price they can now get for their business.”
Emma Keeling is COO to Corbett Keeling Corporate Finance – www.corbettkeeling.com.