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Rockworth Management Partners

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The top 5 drivers behind current M&A activity

1. Supporting businesses returning to work whose costs are building but revenue and activity is lagging

The Covid epidemic has seen businesses closed and unprecedented support. We are now seeing society try to return to normal and as most would have predicted, the exit from lockdown will be longer and more complex than the beginning.  Many businesses have a level of cost and activity below which it is impossible to function – the market often shows little sympathy. Owners now need to explore the multitude of different financing options.

The positive news is that government, banks, and many other funding sources have recognised the challenge this presents to individual businesses and are ready to help. This may come in the form of new funds, or replacing debt for equity, or even collaboration between SMEs and larger corporates with strong balance sheets – the point being that M&A and investment activity is being driven by this need and there are options available. In order to survive and progress in the most positive way, it is important to explore all options and create a choice before it is too late or the ‘gap’ becomes too big.

2. Adapting to changing markets

Since the start of the year customer behaviour has changed both in B2B and B2C markets – it is well documented how many markets have been affected including increased use of digital technologies, revised business models, and ‘just in case’ as opposed to ‘just in time’ supply chain priorities.

These changes are both positive and negative for different companies. It may trigger a need to acquire or merge to adapt to a changing market, or it may generate activity to capitalise in a newly discovered strength compared to previous market positioning.  Both types of driver are actively promoting increased levels of corporate M&A and investment activity at present.

3. Capitalising on investors’ perspective towards those sectors that have benefited from change

The UK has more Private Equity firms, angel funds, alternative lenders and forms of investor than ever before.  Many of these organisations have followed a ‘generalist’ approach to different sectors, investing in individual businesses based upon their own merits rather than following a sector-based ‘thesis’.

As a result of the Covid epidemic many sectors that have traditionally been very attractive to outside investors such as restaurant chains and high street retail are suddenly found to be very much more difficult, which in turn means that other areas are comparatively attracting much more interest from investors. These include the obvious areas such as healthcare and digital businesses but also now highlighted are manufacturing, construction and consultancy businesses that previously may have been lower down on financial investors’ lists.

4. Exploring international options for businesses in a different world – supply change disruption, changed travel habits & Brexit

Business in the UK has changed more than many of us can remember as a result of Covid and Brexit.  The effects of the epidemic have been universal across many different countries – testing supply chains (more reshoring), and accelerating remote working practices (through digitisation and with it fragmentation of location and a greater freedom to collaborate remotely).

Whilst the adoption of the changes has been extremely difficult in many circumstances, it has also led to opportunity for greater collaboration across borders, opportunity for local providers to compete with low cost outsourced suppliers, and also corporates seeking to ensure they are best placed to benefit from wider changes over the coming years.

As a case in point, our increased collaboration (including via our partner firms in the International Corporate Finance Network) with overseas organisations has led to an even greater number of cross-border discussions on transactions where boundaries and borders are becoming less and less important when it comes to communicating and collaborating on buying, selling and investing in businesses.

5. Completing before any changes to Capital Gains Tax (CGT) or a change to personal outlook

There are of course the personal stories that we hear every day.  We have all been affected by recent events as a result of the pandemic and to a greater or lesser extent will continue to be for a very long time.  This has caused many individuals to ask questions about their priorities, to find the energy for a change in direction or to decide that they would prefer to take a more balanced approach to personal risk. 

This reflection may be a catalyst to explore how best to address all the aims of an entrepreneur – financial and personal as well as what is best for the company that they are leading.  Coupled with discussions about changing tax rates, particularly those associated with wealth such as Capital Gains Tax and Inheritance Tax, we are again seeing this as a catalyst for increasing levels of discussion about the future. 

Fortunately, unlike previous downturns, this time there are more options available than ever and plenty of buyers and sellers keen to talk.

What’s Next?

We provide corporate finance and strategic growth services across London, Oxford, the South East and the whole of the UK.

We support companies and their shareholders to sell, acquire and raise equity funds, connecting UK and International investors & acquirors to successful UK companies. Our services cover Valuations, Competitor analysis, Deal data, Growth Factors, Deal Checklist.

We offer bespoke complementary research projects.  Whether on market or competitor activity, company valuation, business planning or prepping a due diligence exercise, tell us what you need to drive your business value forward.

Call us
01865 784 896

What our Clients say

  • Immense thanks to you both, Lawrence and Zuzana,for all of your hard work and trustworthy advice on this deal; your focus and patience have been incredible. I've been hugely impressed at all stages on how you've guided me through this process; and how you've kept cool heads when it must sometimes have been very challenging to do so. I'm really positive about the next stages. Extremely happy to recommend Rockworth.
    Andy Crysell
    Founder & CEO, Crowd DNA
  • Having been involved with the company for several years prior to the transaction, it was a very natural step for Lawrence and his team at Rockworth to lead the transaction with Investindustrial on behalf of the family shareholders. The key factors in the decision were to maintain absolute confidentiality so as to avoid disruption to the company that had been owned by the founding family for 110 years. Rockworth managed the sale process effectively, coordinating at times a very large number of advisors and negotiating all aspects of the deal alongside management and the shareholders. Rockworth also managed to keep to a tight timetable, agreeing the deal at Christmas and signing 2 months later in order to be able to announce the transaction at the Geneva motor show. The resulting transaction was as good as anyone could have hoped for and all involved are excited about Morgan’s prospects going forward.
    Dominic Riley
    Chairman, Morgan Motor Company
  • The Directors of GBCC were advised thoughout by Rockworth Management Partners whose market expertise enabled them to identify a number of potentially interested parties, of which Swan Mill Holdings became the purchaser.
    Chris Davies
    Finance Director, Great British Card Company
  • .. Thank you everyone at Rockworth for their guidance, advice and pragmatism during what has been a very quick turnaround. It has been a pleasure.
    Andy Whittard
    Managing Director, Cherwell Laboratories Limited
  • The Rockworth approach ensured that we were looking at companies we could be confident had a genuine interest in the transaction without revealing exactly who was looking.
    Jim O’Connor
    CEO, i2N
  • Rockworth provided the support, experience and the technical knowledge that we needed to secure a successful sale.  Lawrence and his colleagues are all high calibre individuals, and I would certainly recommend them.
    Alice Watson
    Founder, Porge Research
  • During the whole process the team at Rockworth were always available to answer questions, no matter how banal, and held our hand through the whole procedure... I can honestly say that without the Rockworth calm hand on the tiller I am not sure we would have got through it in such an easy manner.  
    David Bilton
    Director, CadCam Technologies Limited
  • Kittiwake Developments chose to work with Rockworth on the basis of their approach, networks and reputation.  Lawrence and his team provided excellent support throughout the entire sale process and enabled the company to achieve an outstanding result with the sale to Parker Hannifin. Whilst there was a great deal of complexity at times, it was managed with great care and my colleagues and I enjoyed working together with the Rockworth team throughout. I would have no hesitation in using Rockworth for future transactions and would recommend them very highly to others.
    Martin Lucas
    MD, Kittiwake Developments Ltd
  • Rockworth’s advice and guidance played a key role in the acquisition process at every step of the way – from creating the initial datasheet to the conclusion of final negotiations. In particular, the team’s exceptional support during due diligence was fundamental to meeting a very tight timeline that was just six weeks from formal offer to completion.
    Simon Flatt
    Founder, Pinnacle Marketing Ltd
  • I would like to thank you and the team for the major contribution you made in the sale of Cromptons Healthcare. It turned out to be a very complicated deal and I have to say I was staggered by the commitment and effort that was required from us all. I was impressed by both the professionalism and the support that Rockworth provided, which proved to be absolutely essential to me. I had not fully appreciated beforehand just how necessary that support would be.
    Martin Calhoun
    Owner, Cromptons Healthcare Ltd
  • Lawrence, many thanks to you and the members of the Rockworth team for achieving such a great result for us with the sale of Young Black to Indutrade. It is the best possible result we could have achieved, both for ourselves as shareholders, and for our staff, ensuring not just the continuation of the company, but positioning it for further growth through the development of our Max and Montana brands. We were very pleasantly surprised at the range of potential acquirers that William managed to introduce us to, and had no idea initially of the types of acquirer that you would manage to find from outside our direct industry. Yours and Zuzana’s thorough approach to Due Diligence was enormously helpful, and as I said before – a really impressive team effort from all involved.
    David Black
    Managing Director, Young Black IS Ltd
  • Rockworth was the ideal guide and partner in our search for a buyer for our company. Their process, insight and people skills were the perfect antidote for our inexperience and were a major factor in achieving the smooth path to our desired outcome. From the start their approach suited our needs as a privately owned company with limited resources to run the business and undertake a transaction. Particular features of their work included: the confidential, targeted development of contacts to generate a shortlist of worthwhile interested parties; the professional way they managed all phases of the process; their support for the development of presentation materials and answers to due diligence questions; and their communication and negotiation skills. They were invaluable in helping us understand what was needed and what we might reasonably expect. I cannot recommend them highly enough.
    Tim Champion
    Managing Director, H.Squared Electronics Limited
  • Thanks for the efforts of the Rockworth team in concluding what we hope will be a happy outcome and in particular we should thank you for being so persuasive regarding what a great investment KDL would be to external parties! No doubt we’ll continue to remain in touch particularly if we are chasing after local acquisitions.
    Andre Blackburn
    Owner, Kenure Developments Limited
  • I would like to thank Rockworth for their efforts in managing the deal process of our recent transaction: from initial preparatory work and advice through the deal process and to final completion, we found your work to be invaluable. I was particularly impressed with the careful and thorough management of the due-diligence process carried out by yourself and the team: the consistency and detail-oriented manner in which this work was carried out was much appreciated and ensured that the deal completed smoothly, even accounting for the different languages and countries that formed part of this transaction.
    Fabio Antoniazzi
    Founder, La Credenza Ltd
  • As a family owned business it was extremely important to us that we had an advisor who took real care and attention to the detail of our business which is in a niche market. Lawrence Price and his team demonstrated real commitment to the deal, both in researching appropriate potential acquirers and following this through in a diligent and extremely supportive manner. I know that without Lawrence and his team we wouldn’t have achieved the successful outcome that we did.
    Rachel Bush
    Owner, Bush & Company Rehabilitation Ltd

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