Crisis, What Crisis?

Insights by Peter Watson.

One week we are wondering about the spectre of nuclear war, the next financial meltdown. Some autumn (began on 22nd September!).

It is a reasonable question to ask what impact this may have on the market for Mergers & Acquisitions. Markets took a tumble last week but as I write have recovered a little ground.

Our own view is that tech sector SMEs (particularly ones generating positive cashflows) remain attractive propositions in times of inflation. Yes, borrowing costs are increasing, but with inflation high, it is reasonable to expect returns on loans to increase. What is more, many businesses are sitting on substantial cash reserves and whilst interest rates are rising, the returns are still well below inflation.

Despite the current turbulence in the markets, we remain busy with business sales and acquisitions. One consequence of the fall in the value of the pound is to make UK targets more attractive to overseas buyers from a valuation perspective, particularly for US companies (they literally get more bangs for their buck!). As business owners, we largely push macro economic issues to the background and get on with the here and now.

For this reason we remain positive – despite the headlines!

If you are thinking about selling your tech business in the next few years and would like to find out more about the sector M&A market, how tech businesses are valued and what you can do to increase the value of your business, then please do join the virtual seminar we are hosting tomorrow morning:

How to get Top Value for Your Tech Business
Tues 4 Oct 10:00-11:45