With the promise of an M&A upswing in the air this year, there is no doubt dealmakers are primed for a spate of buyout projects coming their way. It is a competitive, cut-throat space. The race is on to engage the industries that are projected to deliver the strongest valuations and find a unicorn in the rough.
The key question is, how to get in front of prospects when they are initially considering a sale or the next investment round?
Previously we’ve unpicked 2024 corporate finance industry trends, but here we’ll break down the buzz on three sectors positively impacting the UK’s M&A recovery and strategic considerations that could aid communicating the value your firm can bring.
A healthy biotech acquisition pipeline
With a thriving longevity economy and booming wellness industry, the battle for which biotechnology companies can carve out success beyond early-stage investment will hit new peaks. That investment pipeline is looking healthy, including recent stories such as Baseimmune’s recent $14m raise and L’Oreal’s VC fund BOLD investments in longevity biotechs. And after cementing its leading credentials in British-made vaccines and treatments during the pandemic, the UK can claim solid gains over its international peers.
The coming challenge, and opportunity, will be balancing industry and mass market awareness building amidst a tightening regulatory landscape. It will be interesting to see how the mixed reception to Europe’s AI act when it passed earlier this month, for example, impacts data gathering and sharing for life sciences companies that centre their offering on biomarker diagnostics.
In a high stakes industry that could literally change lives for the better, it’s important for dealmakers to show clients they understand the economic, financial and social landscape just as well as the potential of exciting research breakthroughs, to guide them to success. A considered thought leadership campaign with subject matter experts could help executive teams to understand your expertise, even when the ins and outs of previous matters need to remain under wraps.
Scaling industrial companies: a M&A bright spot
Another sector poised to benefit from M&A activity is manufacturing and industrials, with BDO and Make UK research showing over a quarter of UK manufacturers (26.8%) were looking to scale operations through M&A in the next two years.
Promising deal activity is already on the cards, with a flurry of smaller agreements aiming to balance out a slump in headline-grabbing blockbuster deals. It is a welcome change for these industries that are prioritising stability despite economic challenges and supply chain bottleneck issues.
While it’s understandable that communicating sensitive, financial scenarios can cause most clients to be reticent, a successful deal close presents a good opportunity for firms to demonstrate they have successfully scaled businesses by capitalising on market momentum. Knowing how to navigate sharing client case studies or testimonials amongst target sector audiences to a firm’s advantage, can mean the difference between flexing industry expertise or placing client trust at risk.
U-turns and flip flopping in the energy sector
Corporate finance activity in the energy sector tells two diverging stories, which reinforces how essential it is to have tailored strategic communications strategies.
On one hand, major oil and gas producers have taken the crown for recent M&A deals, when faced with maturing business models.
On the other, the US$70.1 billion VC cleantech boom is expected to moderate. Policy U-turns from both the UK Conservative and Labour parties, a pullback in sustainable tech investment and regulatory changes globally through the CSRD and SEC will no doubt impact dealmakers’ manoeuvres in the coming months.
Alongside good governance practices, the right comms counsel on how and when to communicate progress towards making lofty net zero goals a reality – even down to providing clarity on the definitions of ESG and sustainability terminology in external and internal communications – will be key.
Right people, right place, right time
While it can be an encouraging vote of confidence for a business to sit within sectors that are rich with investment and scale opportunities, a significant amount of work must be done behind the scenes to ensure businesses clear due diligence in a sale.
Support through this process comes in many forms, from financial advisors that help business leaders demonstrate the health of their balance sheets, corporate finance professionals who manage both sides of the deal, to the industry partners and employees that it will impact. Entrusting the right partners is crucial – and if your firm’s capabilities are not front of mind, it’s a missed opportunity to show how your USPs can amplify theirs.
Regardless of where you fall in that M&A life cycle, effective corporate communications strategies should be a core consideration well before a client’s deal closes. Clear, proactive communications tailored to reach the clients you want to work with, and by extension their own for shareholders, investors, stakeholders and customers, can have positive impact on deal trajectory.
With PwC and Morgan Stanley predicting an M&A surge, and media coining 2024 the year of London’s mini M&A boom, opportunities abound and it could be time to get ahead of the curve. If you would like to discuss how we can support your business and clients through the next chapter, get in touch today.