RSS feedsReports of the death of M&A may have been greatly exaggerated. Well, that's according to experts in the field grappling with the effects of the credit crunch.
Despite the appalling statistics emerging over recent weeks, M&A practitioners among the firms remain bullish about their prospects.
The death notices have been plentiful. Surveys show that the cash raised on AIM in Q1 is down 40%, suggesting that listing on the alternative market has run out of energy, while other figures reveal that private equity acquisitions in Q1 are also down significantly by about 19%.
So are there no deals to be had for corporate finance professionals? Look at the numbers again. Overall Q1 saw 791 deals, down only around 10% on the previous year, remarkable given the gravity of the credit crisis. And while fundraising may have dropped off on AIM, actual listings have held up with 32, around half of which had no money raising intention.
Why is all this significant? It shows the market in transition.
While private equity may have suffered, corporate buyers have become more competitive and advisers from the accountancy sector expect to keep their revenues up.
'What is apparent is that the lower market, or mid market up to deals worth £100m are still happening while there are very few deals above that,' says Jon Breach, M&A partner at BDO Stoy Hayward.
On AIM, the listings are taking place to put companies in a good position ready for an upturn, meanwhile firms are focused on doing business with the clients they already have.
Chiltern Taylor, Baker Tilly's head of capital markets, remains certain that there's still business to be done. 'We have 160 AIM clients. They're growth companies and likely to be involved in acquisitions and that's where we can still do business because that still requires our skills.'
Taylor also believes that expertise in Venture Capital Trust financing, where an estimated £400m remains available for investment, will also help the firm continue to generate business.
Back at BDO, Philipp Prince, a corporate finance partner, sees AIM as a significant lead to other business. 'If you are not playing in the AIM market, you won't get the leads to other capital markets,' he said.
And other markets are where it's at, with BDO focused on improving the firm's advice on what it sees as resurgent markets elsewhere around the world. 'London has seen its peak and other markets are coming back,' he said. So, no funeral rites yet for M&A.
