Many people have been asking me how I expect the corporate deals market to perform in 2018.
For us, 2017 was a very busy year where we advised on corporate deals worth in excess of £25m. Will 2018 be another big year for business transactions?
Uncertainties surrounding Brexit will remain – but 2018 should see the implications for businesses becoming clearer.
Because the Brexit question takes us into utterly uncharted waters we simply don’t know. Perhaps all we can sensibly say is that as with any fundamental change of a status quo, the potential downsides are usually more readily identifiable than possible upsides. My own view is that it will likely not be as bad or as good as both extremes claim. Businesses will either manage, flourish or fail in the post Brexit world, as they always have done with any threats.
Interest rates may start creeping upwards if further base rate rises occur. The recent comments coming out of the Bank of England suggest we may see more rises in 2018. But the Bank will be mindful of not choking off the economy which, despite low (by recent standards) unemployment figures, still strikes many as fragile.
Looking further afield, geo-political factors could also impact significantly. I am thinking here of tension in the Far East and the continual rise of China to a position of global primacy. That is a longer-term trend, but the chafing which might arise in its relations with the USA in particular could have ripple effects which lap up on our shores.
Whatever happens across the wider economy, businesses and their owners will still move towards transition points, be that owners wanting to retire or a business becoming part of something bigger.
My advice to business owners eyeing deals in 2018 is that there will be many opportunities, so keep an open mind and be alive to them. If you are thinking of selling then ask yourself why this is. What is it that you are trying to achieve by selling the business? Is it a sum of money? Or is freeing up your time more important? Depending upon your ultimate goal it may be possible to achieve this in another way and yet still retain ownership of the business.
To those who are considering acquisitions, getting your funding in place beforehand will give you certainty, flexibility and the ability to act quickly.
Stephen Gregson is corporate finance director at MHA Moore and Smalley