Despite the looming EU Referendum and increasing uncertainty, the second quarter of 2016 recorded deal volumes not seen since the boom times of Q3 2008, according to a report published by accountancy and business advisory firm BDO LLP.
The PCPI/PEPI* index, which tracks multiples paid by trade and private equity buyers for private companies, saw a total of 707 deals completed in Q2 2016, with both trade (10.2x) and private equity (11.5x) prices remaining high and in line with recent pricing.
Roger Buckley, M&A Partner at BDO, commented: “Is this increase in deals in Q2 indicative of a watershed moment? Possibly not. Those intent on doing deals were not overly concerned in the run up the referendum. Once the initial shock of Brexit subsided, it has largely been business as usual and this is because the market fundamentals remain strong.
“It’s still early days following the result but a theme is emerging of overseas bidders seeing opportunity in the UK, with the fall in sterling outweighing the risks of Brexit uncertainty. In particular, we are seeing US private equity money coming into the market which perhaps is not surprising given the pound’s three decade low against the dollar.”