Key takeaways from pro-Manchester’s corporate finance event

If, like us, you’re interested in the world of corporate finance, private equity and dealmaking but weren’t able to attend pro-Manchester’s Corporate Finance Mid-Year Review event, here’s a quick overview penned by Ruth …

My takeaways from the first panel discussion which featured lively contributions from Ben Wildsmith (EY), Sam Davies (Cowgills), Alistair Hesketh-Hutson (Equals Money) and Subrah Krishnan-Harihara (GM Chamber of Commerce):

• The ‘silly’ price tags and multiples witnessed pre-Covid are a thing of the past

• Sensible valuations are back which is helping attract more bidders

• That said, many feel deals are currently being under-valued but this could be viewed positively as it means investment is being attracted into the UK

• The change of government is likely to drive deal volume and values up … despite the CGT Sword of Damocles making its presence known

• In fact, there has been a post-summer flurry of activity, especially in the lower market, as people try to get deals completed ahead of the Chancellor’s announcement

• Pessimistic talk and reporting is distracting and breeds negativity

• AI will not have a major impact on the deals process which will always rely on human interaction and relationships (loved AI in 2024 being compared to brick phones of the 1980’s!)

It was quite reassuring that the panellists all agreed on two things:

• Despite everything that’s thrown at it, the UK economy remains resilient

• Green shoots of recovery are starting to appear which is leading to cautious optimism in the deals community

The second panel discussion featured Victoria Price (A&M Tax), Kieran Lawton (Palatine PE) and Mark Ward (DC Advisory). The key points that stood out for me (speaking as a business owner, not someone involved in the dealmaking world):

• If you’re selling, know what you want both – type of deal, amount, future involvement

• If you fail to prepare properly in the months ahead of going to market, you stand to lose value

• Private equity investors are holding their assets for far longer due to a combination of things that have affected the economy (Brexit, Covid, war, Truss)

• This is not necessarily a bad thing as it is the responsibility of investors to put the interests of the business first (obviously, it’s more advantageous to them, too, in the longer term)

• The importance of evidencing organic growth – as opposed to simply growth through acquisition – should always be factored into deals

• Business owners should either sell NOW, go offshore or create a gain now (wasn’t entirely sure what this meant) to avoid CGT

Again, all panellists were in agreement about two things in particular:

• Manchester is an ace place to do deals – the market is unrecognisable from five years ago and can genuinely stand toe to toe with London, especially as we can now boast credible sector specialists

• Getting deals done is all about relationships and ‘abrasive buyers’ should be avoided like the plague!

Thanks to Gill Bellchambers from Axon Moore for hosting both panels.

In between the above, Michelle Mullany (MHA) had a lovely fireside chat with Hayley Roberts, CEO of Distology, who spoke from the heart of her experiences dealing with the dealmakers. Her advice to them:

• Don’t quash the entrepreneurial flame by constantly focusing on predictable outcomes

• Respect the fact that entrepreneurs have put blood, sweat and tears into launching and growing their business – respect that, be nice and don’t get personal with your criticisms

• Accept that entrepreneurs and dealmakers are cast from very different molds – find the middle ground and don’t try to force a square hole into a round peg

• Make sure you have a deep understanding of the business you are investing in – not only does it show commitment, but it is also invaluable when it comes to identifying value creation opportunities

And to echo the recurring theme of the day, Hayley said personal chemistry was essential when choosing an investor.

All sessions provided food for thought and were interesting, insightful and enjoyable. Thanks again to the organisers and all contributors.

Oh, also loved Hayley’s view that schools should focus less on subjects and grades, and more on competencies and resilience in pupils. Hear, hear.