Deal Volume Analysis – Impact of Covid-19

28 May 2020

germ graph

The Covid-19 pandemic has had an unprecedented impact on the UK economy.

April 2020 saw a significant fall in UK monthly deal volumes, which suggests a slowdown in the UK M&A market. This was due to global economic uncertainty, reduced freedom of movement (both goods and people) and social distancing measures. Similarly, the 2008 financial crisis resulted in a prolonged period of depressed UK M&A market activity. Unlike 2008, however, there does not appear to be a constraint on credit markets in the current financial crisis. Whilst there is significant uncertainty as to the timing of the subsequent economic uplift, any future improvement in general economic conditions may positively impact private business valuations. If considering a potential sale, vendors should address a number of key points in order to maximise final exit value.