M&A activity hits record level, reports BDO analysis

Mergers and acquisitions deal activity reached its highest level in eight years in the final quarter of 2016, according to a BDO report.

BDO’s Private Company Pricing Index/Private Equity Pricing Index (PCPI/PEPI) report revealed that 771 deals were completed in the final quarter of 2016, an increase of 33% when compared to the previous quarter total of 578 deals. The number of deals was the highest recorded since the second quarter of 2008.

A total of 672 were completed by trade buyers, with companies undeterred by Brexit concerns. Private equity activity dropped slightly to 99 deals, compared to 106 in the previous quarter.

Yet growth in M&A activity “has not been at the expense of deal values”, BDO said, as the trade and private equity multiples remained at high levels during the final quarter of 2016, at 10.5x and 11.3x respectively.

Roger Buckley, M&A partner at BDO, said: “Q4 deal volume was the perfect end to an active year of M&A. Demand for good quality assets continues to outweigh supply. Despite concerns around Brexit, economic indicators remain positive and businesses continue to have their sights on growth. We expect deal volumes and values to remain strong for 2017.”