Merger and acquisition activity continued to falter after June’s referendum vote to leave the European Union.
According to analysis by Imas, in the 12 months to June, 41 deals valued at more than £100m were announced; an average of between three and four a month.
But post-Brexit, in July only one such deal was announced: MasterCard’s £700m acquisition of electronic payments platform VocaLink.
Meanwhile, for all financial services deals valued at more than £5m, there were on average 15 deals announced a month in the 12 months to June, compared to only ten in July.
This was also less than in July 2015, when there were 17 such deals.
Olly Laughton-Scott, founding partner of Imas, said whilst insurance and financial support services deals were at average monthly levels, investment and lending deals were sharply lower.
“Although uncertainty typically decreases M&A activity, major changes are often a catalyst to activity as companies align themselves to the new reality,” he explained.
“Brexit may have caused a short term drop in activity, but it is too soon to call the medium term impact.”
The self-invested personal pension markets proved to be active with M&A during July, with one of the largest transactions of the year taking place, as Rowanmoor Group was bought by Embark.
Meanwhile, Curtis Banks bought the Sipps business of European Pensions Management and Talbot and Muir bought Attivo Group’s Sipp and Ssas administration business.
Brian Spence, founding partner at Harrison Spence, agreed there had been a slow-down in M&A activity in the advice market, but disputed that the reason for this was Brexit.
“I don’t think Brexit has had an immediate impact because there has been a natural slow-down in the pace of M&A,” he stated.
“We are a long way from RDR now and businesses that are here, are here to stay. They are focusing on profits rather than models of recurring income and therefore a lot of the fizz has gone out of the market because of natural causes.
“But the deals that are going ahead are large,” added Mr Spence.
