The deals outlook for 2015
5th February, 2015
As the build-up to the Greater Manchester Fastest 50 2015 continues, Ward Hadaway Corporate Partner Paul Johnson looks at the prospects for corporate deals this year.
FORECASTING the future is always a tricky task, particularly when it comes to the economy, but there are certainly reasons to feel positive about the outlook for corporate deals for the coming year.
Just as with the economy, confidence is always the crux when it comes to mergers, acquisitions and disposals and the economic outlook is a key factor when assessing whether it is the right time to make a move.
Paul Johnson
There are a number of uncertainties on the horizon: the possibility of a Greek exit from the Euro, our own General Election, the effect of oil prices, deflation, interest rates, etc. but if there is one thing the last seven years has taught us, it is to expect the unexpected, so to a certain extent people have built these factors into their assessment and as positive economic data continues to arrive providing evidence that the economy is generally continuing to pick up, confidence grows.
And all of this has been reflected here in Manchester which saw something of an investment boom in property in 2014 coupled with strong transactional deal flow, including a number of high profile IPOs.
This and the promise that at last we may have some direct control over the key levers of economic growth through ‘Devo Manc’ means we enter 2015 with renewed confidence and vigour.
I would expect to see increased activity in deals in consumer facing businesses such as leisure this year as people see higher than inflation wage settlements and cheaper fuel and energy costs give a boost to their spending power.
“Eds and meds” (education and healthcare) are absolutely vital to growth for modern world class cities. Manchester and its surrounding area is blessed with leading universities, first-rate further education colleges, and outstanding hospitals and healthcare companies. So I think we can expect to see activity in these areas.
The technology and creative industries sectors are also tipped for growth and again with developments like MediaCity UK, Alderley Park and the forthcoming National Graphene Institute, Manchester is extremely well placed to drive home the advantage.
As well as the opportunities there is the money out there to support them. I expect funders of all shapes and sizes including Private Equity to be extremely active in 2015.
We are seeing management buy-outs returning where companies particularly international ones, are seeking to divest themselves of non-core businesses. We are also seeing the return of the ‘traditional’ MBO where the owners are looking to retire and hand over the reins to the next generation as price expectations on each side of the table align.
2014 saw a return of the IPO and I would expect the market sentiment to continue this year.
The prevailing mood as we head further into 2015 is one of optimism. The achievements of the Greater Manchester Fastest 50 – to be unveiled shortly – will doubtless give us 50 more reasons to be positive about what the year will bring.
* Find out more about the Fastest 50.
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