Exit deal directors are getting younger

NEARLY half (44%) of directors orchestrating business exit deals in Wales in recent years were under the age of 50, shows research from Gambit Corporate Finance.

The Cardiff Bay head- quartered firm, which has been at the heart of some of the biggest corporate deals in Wales over the last two decades, has published in-depth research analysing Welsh company exits between 2006 and 2010.

The survey, which today is being distributed widely to entrepreneurs and stakeholders in the Welsh economy, reveals that the average age of directors involved in exit deals fell from 54 in 2006 to below 50 in 2008.

Between 2006 and 2010 exit deals were most prevalent in the South-East Wales, at 63% of total deal flow.

Those in the South-West accounted for 23% and the North- West just 14%.

To factor out the impact of larger deals, all exits above £100m – although of a limited number over the time frame – were not included in the analysis.

Gambit partner Frank Holmes said: “Nearly two-thirds of exits involved companies that were based in South-East Wales – largely concentrated in Cardiff and the surrounding area.

“Moreover, 25% of the exits involved companies which were less than five-years-old, while a further 40% had been in existence for less than five years.”

The research also shows that 75% of the businesses had a turnover of less than £10m before exit.

The exits were executed via a variety of routes, including management buy-outs and buy-in and flotations.

Mr Holmes said; “2007 stood out as the busiest year of the decade for exits. During the year, five Welsh headquartered businesses, including Finsbury Food and Boomerang Plus, were admitted to the Alternative Investment Market.

“The following year [2008] was upheld by the flight to exit before the abolition of capital gains taper relief.

“Both 2009 and 2010 proved to be a non exit for SME exits, with a total deal value of only 15% of that in 2007.”

Serial entrepreneur and chairman of SmartSolutions, Paul Ragan, said; “This survey is an excellent piece of work by Gambit, a company I personally know very well as they managed my own sale [ProtectaGroup].

“The research clearly identifies key areas and information around M&A activity, and for me reiterates the need to prepare well if you wish to maximise value.

Gambit’s research was supported by Marcus Dunk, a student at Uwic’s School of Management.

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