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Human Capital - M&A Market in Focus October 2021

19 October 2021

Gambit’s Human Capital team announces the publication of its latest insight, ‘UK M&A Market in Focus’. This edition discusses the buoyant activity in the market, specifically focusing on the key market trends and drivers underpinning enhanced deal volumes and valuations.

Report Summary

  • With tax rises, including Capital Gains Tax, firmly on the political agenda at present, now is the optimal time for shareholders to execute transactions and ensure maximum value realisation, before potentially significant changes to the current regime take effect.

 

  • EV/EBITDA valuations in the Gambit Human Capital Index have increased by 37% in the last 12 months, fuelled by publicly listed companies’ strong trading performance, unprecedented amounts of private equity dry powder, and an economic ‘return to normal’. This presents a ‘window of opportunity’ for shareholders to execute succession strategies while transaction multiples remain at high levels.

 

  • The rise in inflation post-pandemic could lead to an increase in interest rates over the next 12 months, and a sense of urgency has been created to execute debt funded transactions before rates rise and the cost of borrowing becomes more expensive.

 

  • Numerous sub-sectors within the Human Capital market such as IT, Engineering and Education have enjoyed particularly high levels of demand, and recruitment firms specialising in these sub-sectors are attracting increasing levels of appetite from larger acquirers looking to reweight their portfolios through M&A.

 

  • Conditions are optimal for sellers to maximise value, with highly liquid corporate balance sheets, pent up demand, and a resurgence of confidence from corporate development teams to engage with the M&A market.

 

To read the full report, click here.