More private UK firms planning acquisitions

The number of private British companies looking to grow via acquisitions has jumped to more than a third, research from Grant Thornton shows.

A year ago, 26 per cent of respondents said they were planning to bolt on additional companies. Now this has risen to 36 per cent, indicating that privately held businesses see growth ahead.

Meanwhile, valuations of high-quality, fast-growing businesses are being boosted by intensifying competition among bidders.

“Over the last 12 months there has been a significant improvement in the interest, appetite and financial capability of trade buyers to do deals. We have seen evidence of high-quality businesses attracting premium prices. In particular, fast-growing online retail businesses have attracted impressive takeover offers in recent months,” says Mike Hughes, corporate finance director at Grant Thornton.

Around 31 per cent of all UK private businesses expect to make domestic acquisitions and about ten per cent are planning cross-border deals.

The key M&A drivers for British firms were to build scale, acquire new technology or established brands, gain access to new geographic markets and gain access to lower cost operations.

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