Number and value of Welsh mergers and acquisitions fall

THE value and number of merger and acquisition deals fell sharply in Wales last year, according to data from Experian.


The figures, which also cover Stock Market flotations, placing and right issues, show that in 2009 deals worth £383.43m were struck, a fall of 88.2% on 2008 when the value of deals reached £3.25bn – although the £2bn investor buyout led by Nordic Capital and Avista Capital of Deeside based ConvaTec was a significant contributing factor. 


In total in 2009 there were 103 merger and acquisition and Stock Market deals, a fall of 37.95% on 2008 when there were 166.


Brian Rarity, a consultant with Experian corporate and financial information subsidiary Corpfin said: "Wales has experienced a greater drop in deal volume and deal number than the UK average – especially when considering the year-on-year figures for 2009 compared to 2008.


"Large cap (more than £100m) activity is low and both the mid-cap (£10m-£100m) and smaller cap (under £10m) seem to be in hibernation. The appreciable rise in both values and volumes seen in other regions has yet to manifest itself in Wales."


The biggest corporate deal in Wales last year according to Experian was the £157.6m rights issues from Flintshire-based housebuilder Redrow.


The largest mid-cap deal in the last two years in Wales was the acquisition of Marchmont House, an office property in Cardiff, from Invista Real Estate, by Sydney & London Properties for £97.5m A total of 22 small deals accounting for £38.47m were announced in 2009, while 2008 saw 36 transactions and £118.45m in deal value.


The UK saw a 24.5% decrease in M&A and ECM (flotation, right issues and placements) transactions announced during2009 with only 4,269 deals compared to 5,656 transactions in 2008.


Some £272.6bn worth of transactions were announced in the UK in the year, up by 0.22 % on 2008. In terms of value the biggest contributor geographically was Greater London at £126.8bn, down slightly on 2008 when it was £134bn.


All other regions and nations in the UK had a higher total value of deals in 2009 than Wales, including the south west of England £21.3bn and Scotland £74.4bn.


In Wales total deal value also decreased last quarter of 2009 to £92.43m, a drop of 55 per cent on the Q3 figure of £205.73m. The number of transactions decreased by13% to 20 deals from 23 transactions in Q3 2009.


In terms of deal volumes Wales had the lowest number in the UK. The highest number was in Greater London at 1,487.


On the outlook for corporate deals partner with Cardiff-based Gambit Corporate Finance Frank Holmes said: "We are seeing many larger corporate entities with cash piles waiting for either the right time or the right bargain. So yes, liquidity in the corporate acquirer market is there, maybe not to the extent of the heady days of a couple of years ago, but for the right deal it is available."


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