Early preparation crucial to capitalising on M&A rebound

Takeover interest in UK companies has surged to its highest level in years, meaning that M&A now represents the best route for owners seeking a profitable exit. Against this backdrop, it is even more vital for owners to be prepared to capitalise on these opportunities.

Recent data has shown that the value of bids for London-listed companies so far in 2024 exceeds $78 billion (£61.6 billion), the highest figure since 2018. Falling share prices, combined with a stuttering IPO market, has seen a global recovery in dealmaking. This has also been boosted by the belief that interest rates have peaked.

Victor Basta (pictured above), CEO of boutique investment bank DAI Magister, emphasises that business leaders should closely consider how they can capitalise on the rebound in M&A, by identifying potential acquirers and adjusting their strategic positioning in order to make their business a more attractive target.

Basta commented: “It’s vital that founders and business owners take note of what is happening in the market and allow this to influence plans for the future of their company. There’s no point in pursuing an unreliable exit strategy or additional funding rounds without high conviction of considerable returns – right now M&A is arguably the most consistent and profitable option.

“Typically, the best exits are meticulously thought out and prepared for, which is why it’s important to lay out a clear route to acquisition from a very early stage. The first step is to identify a pool of potential buyers with clear synergies or strategic alignment who are capable of financing an exit.”

This groundwork, Basta says, can enable owners to “prepare a bespoke engagement plan for each buyer, to be carried out six to twelve months before any exit is expected to take place.” Basta adds that such a timeframe “may seem like premature engagement”, but can lead to a more successful exit by allowing stronger relationships and mutual trust to develop.

Basta explains that buyers “more than ever before [...] want to see a clear roadmap to profitability”, highlighting the importance of a strong business plan. He emphasises that financial models must be stress-tested well in advance of the business being brought to market, to ensure they will hold up to rigorous due diligence and not lead to the deal “falling at the final hurdle.”

Basta concluded: “Companies that prepare in the right way generally achieve higher prices when the time comes to execute an exit. In a period where M&A is establishing itself as the most profitable option, starting the process early is crucial for any founder seeking to maximise the value of a future acquisition.”


When preparing for an exit, a vital step is to ensure that the business is not overly-reliant on its owner

Find out more about scaling up a business prior to a sale process

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