Gambit Corporate Finance announces the publication of its Human Capital M&A Market Review for Q4 2018.
In Summary:
- The volume of global human capital transactions remained flat in Q418, due to economic headwinds and a shortage of quality assets available
- European transaction volumes declined slightly but were still at a higher level than across the rest of 2018, due to a reduction in cross-border activity. However, conditions in domestic markets generally remain conductive to M&A activity and we expect to see higher deal volumes once certainty around Brexit is delivered
- There was a marked rise in transactions in the Middle East & Asia region, driven by increased consolidation by Japanese corporates
- UK unemployment remained at historic lows during Q418, and has not been lower since February 1975. Record employment coupled with increasing demand for staff in the UK means that the outlook for the sector is increasingly positive in the near term
- Whilst cross-border activity from Europe into the UK declined in Q418, the UK market continues to attract inbound investment from both the North American and Asian markets
- A shortage of skilled and qualified candidates in several sectors including IT and engineering is a concern and will likely drive strategic acquirers to pursue defensive M&A strategies, to ensure continuity of service offering and access to high quality candidate pools
- The Gambit HC index shows that valuations for public interest companies fell by 15% in Q418, this was due to the underperformance of global stock markets and reflecting ongoing economic and political uncertainty
- Once conditions stabilise we anticipate public interest companies taking advantage of the low cost of capital and assuaging pressure from shareholders to address recent share price erosion, by making earnings and value enhancing acquisitions
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