This article is the first in a series based on transaction activity in the UK automotive retail sector. The remainder of the report will follow over the coming weeks.
2014 saw a continuance of the buoyant market for transaction activity with certain businesses changing hands for record breaking sums. In this series of articles we examine the factors behind this growth and consider the prospects for 2015. Firstly though, we will briefly consider the transaction market over the last 10 years.
The impact of the recession can be clearly seen with strong growth in the levels of activity from 2011 onwards. Figures to date (Sept 2014) show 24 deals, perhaps indicating that volumes of activity will return to the long term average. However, as we discuss further in subsequent articles, we attribute this to a shortage of suitable businesses for sale rather than lack of appetite from those looking to acquire, and we expect 2015 to be a very busy year.
Analysis of the market
Whilst it is certain that volumes and prices are on the increase, understanding the factors driving this is far more opaque. When analysing the position, it is easier to consider both parties to any transaction.
In future articles we will examine “The Buyer”, “The Seller” and “Availability of funding”.
This article by Paul Daly was originally published in AM Online, Franchise Dealer Report 2015.