Despite a challenging start to the year with a third national lockdown, the gradual easing of restrictions, and the continuing successful vaccination rollout in the UK boosted stock markets, increased economic growth, and created a strong rebound in deal activity in Q1 2021.

According to recent analysis by Datasite, the value of deals completed in the EMEA region is up 40% and the volume of deals is up 14% on Q1 2020 (which had not been fully impacted by the pandemic), highlighting the pent-up demand in the current M&A market. Deal activity is currently strong – fuelled by potential Capital Gains Tax (CGT) changes, and low cost of finance.

Technology, media and telecoms activity

As the UK’s largest sector by volume in Q1 with 131 deals, the technology, media and telecoms tech (TMT) sector has flourished throughout the pandemic, fuelled by more companies turning to cutting edge technologies in a bid to gain long-term and sustainable competitive advantages.

The pandemic has no doubt accelerated a shift towards digital, and it is likely the sector will remain attractive as changes brought about by the pandemic continue into the long-term. As more businesses seek to implement increasingly innovative technological solutions, businesses within the TMT sector have a unique opportunity to drive strategic growth, taking advantage of heightened investor appetite and increasing demand for unified tech infrastructure.

Smith Cooper Corporate Finance: Midlands top-10 advisor’s

Darren Hodson, Corporate Finance Partner commented:

“As the analysis demonstrates, telecoms has been one of the more robust sectors during the COVID-19 pandemic. The pandemic has accelerated the shift to digital, and investor appetite in the telecoms sector is high. I expect that deal activity in the sector will continue to grow as more businesses undergo digital transformation and seize the opportunities presented by future technologies. We have completed three transactions in the sector in the last six months, including the MBO of Team Telecom Group (TTG), the international communications organisation behind Affini and Simoco Wireless Solutions, ensuring TTG continue to lead the way in the communications sector”.

John Farnsworth, Head of Smith Cooper Corporate Finance, added:

“It is encouraging to see a definitive increase in M&A activity in Q1, across a variety of sectors. The TMT sector has proved to be one of the clear winners during the pandemic, with a significant increase in deal volume”.

“The outlook is hopeful as we head into summer months. The government’s upgraded expectations of economic growth and low interest rates (assuming inflation remains subdued) will produce new deal opportunities, including those deferred by buyers and sellers in 2020”.

“Against the backdrop of the pandemic, Smith Cooper Corporate Finance had a very good year to March 21, completing 27 deals worth £152m. We are proud to have maintained our top-10 ranking for deal volumes in Experian’s Midlands Financial Adviser league table, and to have multiple award nominations in the forthcoming Insider Deal Awards. These consistent top-10 rankings and awards have helped build our hard-won reputation as one of the “go-to” advisers both regionally, and UK-wide in our specialist sectors”.

At Smith Cooper Corporate Finance, we will strive to continue to deliver innovative, tailored solutions that go beyond merely delivering client expectations. Whatever your aspirations may be, we would be delighted to hear from you, please get in touch today.