Overall deal volumes between the US and UK remained buoyant over the first half of 2018, according to Deloitte.
Deloitte’s latest US-UK M&A Deal Monitor shows a total of 238 completed deals in the first half of 2018, with 152 US acquisitions of UK businesses, and 86 US businesses acquired by UK buyers.
This activity shows a slight increase over the two-year average but down from the record high of 265 in the first half of 2017.
London is home to half (52%) of UK buyers of US businesses, and 34% of the businesses acquired by US buyers in the last six months are in the capital. Across the Atlantic, the top states are New York and California, with 36% of US buyers and 32% of the US businesses acquired by UK buyers based in these states.
Aziz Ul-Haq, partner in Deloitte’s M&A Advisory team, said: “London’s position as a national and global hub for technology and financial services is driving deal activity. The current liquidity in the secondary market is underpinning confidence in speedy completions, however this can distract from firms identifying and realising potentially greater long-term value through primary deals.”
Technology continues to be the most active sector, with over a quarter of acquisitions (28%) being a tech business. Other sectors include business, infrastructure and professional services (14%), consumer business (14%), manufacturing (12%) and financial services (11%).
Financial sellers are twice as likely as other sellers to sell to another financial buyer
The report highlights the trend for financial sponsors, typically private equity, being twice as likely as other asset owners to buy from – or sell to, other financial sponsors.
The share of financial sellers in M&A transactions between the UK and the US rose from 10% to 15% over the last two years. Financial sellers are twice as likely as other asset owners to sell to another financial buyer (39% vs 17%), and financial buyers are more than twice as likely to buy from another financial seller (23% vs 9%).