Deals: Regaining strength in numbers
We asked the experts: do you think the deals/mergers and acquisitions market has fully recovered from Covid-19?
Jon Shelley, head of deals at PwC Scotland
“The knock-on economic effects of Covid remain evident in the deals market – some positive, some negative.
“Deployment of capital slowed, leading to a ‘catch up’ post-Covid, but disruption and inflation are impacting profits and valuations – volatility isn’t helpful for mergers and acquisitions.”
Graeme Williams, head of corporate finance M&A at KPMG UK in Scotland
“After the initial lockdown shock, which saw a number of transactions put on hold or moved to the right, we saw the market bounce back strongly in the second half of 2020.
“While the market has slowed down in the second half of 2022 and 2023, this is coming from a very high bar and a remarkably busy period. What we are seeing now is a return to a more typical market which existed before the pandemic.”
Hugh Campbell, managing partner of global tech advisory and investment firm GP Bullhound
“With the IPO [initial public offering] window closed for the time being, we’re seeing a significant uptick in M&A activity – it’s a buyer’s market as bigger companies seek out bargains when valuations are lower.
“It’s unlikely we’ll see the record levels of deal activity we saw during the highs of 2020 and 2021, but we could see a return to pre-pandemic levels over the next year.”
Will McIntosh, partner Brodies’ corporate team
“The post-pandemic recovery in M&A was swift, reaching record highs by mid-2022. However, the end of 2022 saw deal volumes and values drop due to economic headwinds affecting valuations and availability, and cost of debt. This has been notable in private equity-backed acquisitions.
“Corporates have continued to acquire using their own balance sheets, though deal structures have been adjusted to address current economic uncertainties.”