28 February 2018
Following our blog looking at the headline activity for automotive transactions in 2017, in our second blog in the series we look at 2017 deal volumes and trends.
Activity levels show that the overall volume of deals for 2017 are slightly behind 2016, with 38 transactions completed to the end of 2017, compared to 41 in 2016 and 45 in 2015.
Closer examination of the underlying data indicates that this is due to a substantial reduction in deal activity in the premium sector. Jaguar Land Rover activity in particular has been suppressed (with just one deal in 2017) following the substantial re-organisation of the network that took place in 2016. JLR’s focus is now being placed on significant investment in new combined facilities in line with the brand, which we believe is a partial driver of the general moderation in premium sector activity as the investment has soaked up cash that might have been otherwise spent on acquisitions.
The trend towards purchasers being headquartered internationally continues to gather pace, representing 28% of reported deals by volume. We have seen a significant increase in the number of overseas businesses seeking UK representation with international buyers having an exclusive monopoly on all of the larger deals in 2017.
In addition, it should be noted that the reduction in volume of activity is actually far greater if average deal value is taken into account. The predominance of overseas buyers means that just three deals have had a deal value disclosed against them, so we are not able to quantify the level of this reduction.
Want to know more?
In our blog next week we will look at the trends shaping 2017 activity in greater detail and share some of our predictions for 2018.
In the meantime, if you are contemplating your options in 2018 or have any questions about this blog, please contact David Kendrick or Paul Daly for a no obligation, confidential discussion. Alternatively contact an automotive expert at your nearest location.
To read more about the transactional services we provide to the automotive sector, or to find details of your local UHY automotive expert, please visit our automotive corporate finance support pages.