9 September 2016
Many people, including myself, were extremely nervous after the Brexit vote was announced, with a number of corporate finance transactions being under threat of buyers pulling out and the stock market being volatile. The reality is that the initial knee jerk reaction has significantly improved since the vote was announced and the transactional market remains buoyant.
Whilst the pound has weakened, the attractiveness of UK businesses to the international investor has improved, as the value of a transaction was reduced overnight on the back of this exchange rate movement. It must also be noted that the UK is likely to have the lowest rate of Corporation Tax in any major economy if the 15% rate is introduced, as suggested by former Chancellor, George Osborne recently.
The reality of the situation is that good businesses will always be desirable and, whilst external factors do have an influence, there will always be buyers for these entities. The consideration all businesses should factor in with any transaction is timing, and that couldn’t be any more relevant in times like these.
If you have any questions about the impact of Brexit on transaction activity, please contact your local UHY corporate finance specialist.