2020 Business Predictions: Sally Saunders, Founding Partner at Provantage Corporate Finance

It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead. It has become something of a tradition, given that we’ve been doing this now for over 30 years.

While none of us possess a crystal ball, it is uncanny how accurate some of these forecasts have been over the years.

Here, Business Link catches up with Sally Saunders, Founding Partner at Provantage Corporate Finance.

I am cautiously optimistic for M and A activity in 2020. Some of the uncertainty has gone away with the recent election and the main drivers behind shareholders wanting to sell, such as age, remain a reason to sell.

Companies are under pressure to evolve and grow in this rapidly changing, global economy. M&A is often the fastest route to navigate current and potential barriers to growth and proactively respond to evolving changes.

At the same time, companies are divesting to unlock the required capital to make acquisitions and adding to this, private equity need to invest, creating all the components to a sustained level of M&A activity where prices seem to be holding up.

There remains an active overseas buyer pool as an abundance of high-quality assets make the UK a desirable marketplace for acquisitions. Sectors of interest are in companies with recurring income such as IT, and Technology attracts a high level of interest.

Threatening the upbeat feeling in the UK M&A market is the suggestion of abolishing Entrepreneurs Relief which allows a 10% capital gains tax rate compared to 20%. This was suggested by the Labour party, but since the election, it has been mentioned again by the Institute of Fiscal Studies think tank who suggested it would provide £2.4bn in taxes. This could result in a delay in shareholders selling as they recoup the lost gain by trading longer.