There was an uplift of 9.5% in deal volumes in Q2 2017 compared with the previous quarter, demonstrating the ongoing resilience of the M&A market, according to accountancy and business advisory firm BDO LLP.
Alongside a rise in volumes, the market saw an increase in market valuations. BDO’s quarterly PCPI/PEPI* report, which tracks the multiples paid by trade and private equity buyers, revealed an increase in the average multiples paid on trade deals to 10.7x, the highest levels seen since Q4 2014.
The PEPI index remains particularly robust, pointing to ongoing strength in the private equity market, with investors paying an average multiple of 12.8x for businesses.
Roger Buckley, M&A Partner at BDO commented: “The continued strength of the M&A market might be surprising to some given the political and economic uncertainties in the UK and overseas. However, the strength of private equity funding, liquid debt markets and cash rich corporates means that the number of acquirers in the market exceeds the businesses for sale.
“This is creating a seller’s market, where competition for quality businesses is driving attractive valuations for vendors. The main challenge for investors and corporates is finding and winning the right targets to acquire.