Campbell Dallas hails 2016 the year of the exit

2016 could be the ideal year in which to exit from a business with conditions for a sale set to be amongst the most favourable for many years, according to a leading Scots corporate financier.

Low interest rates, entrepreneurs relief at 10% up to £10m sale value, stable business confidence, larger corporates with cash piles for acquisitions and investors keen to back growing businesses are combining to create a positive environment for exits, said Graham Cunning, corporate finance partner with Campbell Dallas.

However, Cunning warned that these favourable conditions may not last for long, with interest rates likely to edge higher and uncertainty over the future of Entrepreneurs Relief.

“Entrepreneurs Relief rewards business owners for their hard work and fortunately remains in place, so we would urge anyone thinking of an exit to consider the benefits of bringing forward their planning before it is changed. There is a real appetite in the VC, Angel and Private Equity (PE) houses for opportunities to invest in quality businesses with a strong position in their markets and potential for good growth. These conditions will not remain for ever, so 2016 could be an ideal year for an exit, whether as trade sales, employee or management buyout, or partial sales of equity.”

Campbell Dallas also announced that the firm had advised on 15 deals during the year with a combined value of more than £100m.

These included the sale of First Hose to GS-Hydro, sale of Blyth Utilities to Energy Asset Group, acquisition of TPL labels by GT4 Group and the acquisition of HLC (Wood Products) by SCH Group. The firm is winning an increasing amount of lead advisory work, acting for business owners, banks and PE houses, and said that its 2016 deals pipeline is the busiest ever.

However, in relation to the Oil and Gas sector Cunning added: “Oil and Gas is the one sector that remains very subdued and there is unlikely to be a recovery in deal flow until the final quarter at the earliest. That said, despite the oil price crash, there is still an active M&A market in the Oil and Gas sector for quality businesses. Despite the downturn there are still plenty of well-resourced oil & gas corporates that are focussing on executing their acquisition strategies, so business owners wanting to sell may wish to take advantage of that opportunity.”