2020 annual review
Foreword
2020: a year in review
Working alongside our Corporate Finance team, our Debt Advisory experts help private companies and private equity-backed businesses raise and refinance the debt capital they need to drive their businesses forward. Whilst classic bank lending activity outside government backed schemes was limited, 2020 concluded with strong deal volumes, supported in the main by robust institutional liquidity from the non-bank market. Across the year, our team helped clients to tap into government-backed loans, lead asset-backed refinancings and provided solutions to complex financing problems. As we enter 2021, mainstream buyout and carve out financing opportunities are underpinning activity levels and we expect the credit markets to be robust but highly selective. Our Debt Advisory and Corporate Finance teams will continue to work closely together, supporting businesses seeking advice in optimising capital structures, and tapping into financing solutions from a diverse range of specialist and non-bank lenders. Interest from acquisitive trade buyers also remains strong. We have already closed several deals for trade sellers in 2021 at attractive multiples. For those business owners looking ‘inward’ for the right solution, we are still continuing to advise on and implement both funded and unfunded management buyouts (MBOs), vendor initiated MBOs and Employee Ownership Trust solutions. In our 2020 annual review, we share some of the key highlights from the last 12 months, demonstrating where both our Corporate Finance and Debt Advisory teams have supported clients to develop and execute their strategies. Whilst uncertainty in the market will undoubtedly continue, we remain optimistic about the expected levels of activity in 2021, and are now in an even stronger position to advise on a broad range of transaction matters for business owners and their businesses in the year ahead.
As with many areas of the economy, the COVID-19 pandemic had a significant impact on transaction activity in 2020. Across the UK, current data indicates that M&A transactions were down 15 per cent compared to 2019 as a greater number of businesses chose to preserve cash and build resilience to protect against the impact of the pandemic, whilst also focusing on customer and employee relationships. Whilst the restrictions and lockdowns hit deal volumes nationally, at FRP we continued to invest in our team, and increased our activity levels to help more than 30 businesses achieve their strategic M&A ambitions during the year – a strong performance against a challenging backdrop. The year began with record UK M&A volumes – most likely prompted by a desire to complete deals before the changes to Entrepreneur’s Relief that many were expecting to see in the Spring Budget. As lockdown hit, deal volumes began dropping, and increased again in September. This was prompted by clients wishing to both acquire and sell businesses, and buoyed by both the amount and accessibility of funding available from private equity investors and institutional debt providers. Alongside increased transaction activity, our Corporate Finance team continued to grow, as we welcomed Partner, Heath Snyder in Manchester and Director, Gary Hyem in Birmingham. We also expanded our activities in the East of England through the strategic acquisition of JDC Corporate Finance in Norwich – a move that demonstrates our commitment to investing in the expansion and expertise of our team. The acquisition saw the team grow by over a third. We now have 30 Corporate Finance specialists in seven key locations across the UK, putting us in a strong position to support clients, and respond to the increased M&A activity levels we are already experiencing at the start of 2021.
We are delighted to have found in FRP a partnership that shares our core values of professionalism, commitment, integrity and tenacity. Jon Dodge Founder, JDC Corporate Finance
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