While confidence among British business has dipped in the face of global economic and political uncertainty, now is the time for investors with strong balance sheets to ‘show their bottle’.
That’s according to James Waterhouse, director of dealconnections – the only portal providing details of more than 90% of businesses for sale in the UK.
Waterhouse says that, rather than be deterred by short-term disturbances, investors should protect themselves against ‘known unknowns’.
One of the ways business can best do this, Waterhouse argues, is to use the strength in their balance sheets to acquire less stable businesses, along with their market share.
They can then drive out all of the economy of scale and other synergies to create businesses with greatly increased income and a highly leveraged cost base.
Mr Waterhouse said: “The M&A market has never been more buoyant – and the opportunities are definitely out there.
“Last week alone, dealconnections saw almost 100 new mandates hit the market.
“A total of £1.5b in revenues have been made available for acquisition in the last 3 months across just the top ten most active business sectors.
“The volume is increasing week-by-week, as management teams across the country, – in the face of limited debt opportunities – look for strategic partnerships to deliver the potential in their products and services.”
UK private equity dealmakers had their busiest quarter over the summer after the number of deals clinched rose by more than a third.
The traditionally quiet summer lull between June and September sparked back into life with 511 deals signed in the UK, the busiest period since 2009.
This was up 35 per cent on the second quarter and about five per cent higher than the same quarter last year.
Mr Waterhouse added: “Although the number of businesses slipping into administration is at the lowest level for many years, the number of distressed businesses coming to market is one sector that is extremely active right now.
“For businesses with the money and the bottle to take them on, these can represent hugely valuable investments paying back in the short- to medium- term.
“If investors have the guts – and the balance sheet – to make the most of this ‘confidence opportunity’, dealconnections can help them find that elusive golden deal that transforms an organisation and helps set such investors up perfectly to capitalise on the future.”