Accountancy group Azets’ corporate finance division in the South West and Wales has reported growth, despite this year’s “economic uncertainty”.
The regional team said it had completed 19 deals in the last 12 months with a total value of £130m and an average value of £6.8m. The average deal value has increased from 2021 by £1.7m.
Katherine Broadhurst, a partner at the firm who oversees the area said they were still “good opportunities” for acquirers and owners.
Ms Broadhurst said: “Financial due diligence is increasingly focussed on the maintainability of profit, which is even more challenging now given the impacts of Brexit, Covid, inflation, rising interest rates and the effect on customers’ purchasing habits.
“For sellers, we’re finding that there’s a finer focus on finding the right buyers and more interest in deal structure.”
Azets said it had seen many firms in the area look to “streamline” operations as a result of the pandemic, giving buyers the opportunity to acquire “more efficient and profitable” businesses.
Ms Broadhurst added: “Looking forward, we are seeing an increase in the use of earn-outs to bridge the gap between buyer and seller value expectations, managing the downside risk for buyers and providing buyers with the potential for upside. This may increase the length of seller involvement post transaction to support a successful outcome for both sides.
“The next 12 months will see more challenges, but also opportunities – planning will be key across businesses of all sizes.”
Azet’s corporate finance team in the South West and Wales has expanded over the past month, with the appointment of Claire Marshall and with the recruitment of Adam Dix as corporate finance executive and Rhydian Griffiths as associate.
Ms Broadhurst said: “With our new recruits and constantly growing team, we’re well equipped to support clients of all sizes to make suitable and realistic business decisions, as we prepare to go through another tricky period.”
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