So doesn’t time fly?
Five years ago this week, the investment bank Lehman Brothers collapsed, which led to the global financial crisis. Five years on, it is a crisis from which we may only just be emerging.
Of course Lehman Brothers didn’t cause the financial crash, but it was a flashpoint – the catalyst which preceded the dramatic autumn of 2008 when there was a widespread fear that the entire financial system, and the economy, would come tumbling down.
Since that time there has been much soul searching and there have been a number of false dawns.
Five years on, the question is whether we have now turned the corner?
Certainly from a UK perspective there has been much good news lately. The economy grew by 0.7% in Q2, economic indicators for the rest of the year are being revised upwards, and the stock market, despite a dip as a result of the crisis in Syria, is trading at or near its five year highs. Indeed only yesterday, the usually cautious George Osborne declared that “Britain is turning a corner.”
All of this should be good news for those of us involved in building and realising shareholder value.
The most important factor in M&A is confidence. If sentiment is on the up and the “feel-good factor” is back then this should flow into an increased level of investment and M&A. This should be helped by the fact that companies are currently sitting on record levels of cash (15 of the major tech stalwarts in the US, including Apple, Microsoft, Google and Cisco are sitting on $360bn of cash) and that private equity investors have funds that they need to deploy.
Whilst the number of completed deals (so far) in 2013 would indicate a relatively subdued market, we at Livingstone believe that the forward indicators are positive and as such we are feeling quite upbeat. Over the past few months we have seen an increased number of enquiries and our current mandates are at a level that we have not seen for a number of years.
All in all, the prospects are looking good for vendors seeking to sell their businesses or for companies thinking of raising funds.