2020 in review

At the start of 2020, none of us would have predicted what was to come. Even as the UK entered lockdown in March, few people expected the pandemic to be around as long as it has been. There was a sense that there would be an unhelpful pause to corporate activity which would re-start before the summer and ‘normal service’ would be resumed. Our shared optimism was misplaced. By the end of Q3 2020, Experian MarketIQ was showing a 30% decline in deals, the lowest Q3 figure since 2009 and the aftermath of the credit crunch. 

That research highlighted that Gateley was the UK’s leading legal adviser by transaction volume, advising on 110 disclosable deals to the end of Q3 2020. For the same period in 2019, Gateley topped the UK’s deal charts with 126 publishable deals so a fall of just 13% year-on-year. Scotland and Northern Ireland were the worst hit regions for deal activity with reductions of 65% and 54% respectively between 2019 and 2020. The Midlands, North West and Yorkshire all struggled with close to a 35% decline. Certain sectors showed significant growth in deal value over the period but fuelled by different factors: information communications was up by nearly 81% as the world shifted online; whereas an increasing number of transactions driven by insolvency and distressed situations saw the value of retail and wholesale deals rise by nearly 63%, although deal volumes fell by 35%.

During the first nine months of 2020, PE-funded deals accounted for 27% of all UK deals, 17% of all deals in the Midlands and 23% of all deals in the North West.

2020 in review

At the start of 2020, none of us would have predicted what was to come. Even as the UK entered lockdown in March, few people expected the pandemic to be around as long as it has been. There was a sense that there would be an unhelpful pause to corporate activity which would re-start before the summer and ‘normal service’ would be resumed. Our shared optimism was misplaced. By the end of Q3 2020, Experian MarketIQ was showing a 30% decline in deals, the lowest Q3 figure since 2009 and the aftermath of the credit crunch. 

That research highlighted that Gateley was the UK’s leading legal adviser by transaction volume, advising on 110 disclosable deals to the end of Q3 2020. For the same period in 2019, Gateley topped the UK’s deal charts with 126 publishable deals so a fall of just 13% year-on-year. Scotland and Northern Ireland were the worst hit regions for deal activity with reductions of 65% and 54% respectively between 2019 and 2020. The Midlands, North West and Yorkshire also struggled with close to a 35% decline. Certain sectors showed significant growth in deal value over the period but fuelled by different factors: information communications was up by nearly 81% as the world shifted online; whereas an increasing number of transactions driven by insolvency and distressed situations saw the value of retail and wholesale deals rise by nearly 63%, although deal volumes fell by 35%.

During the first nine months of 2020, PE-funded deals accounted for 27% of all UK deals, 17% of all deals in the Midlands and 23% of all deals in the North West.

2020 deals by region

Here you can see a breakdown by office of our 2020 corporate deals.

You will see that we completed 184 corporate deals across Gateley Legal in what was an extremely challenging UK economic and financial environment.

From London through to Leeds, Reading to Manchester, the team supported on deals to the value of £1.685 billion.

Continue ↓

2020 deals by region

Here you can see a breakdown by office of our 2020 corporate deals.

You will see that we completed 184 corporate deals across Gateley Legal in what was an extremely challenging UK economic and financial environment.

From London through to Leeds, Reading to Manchester, the team supported on deals to the value of £1.685 billion.

Continue ↓

And what about 2021?

The last quarter of 2020 has seen deal activity at extremely high levels, for many of our dealmakers transaction volumes have been at levels not seen for many years. Some of this is driven by the opportunities which undoubtedly arise when certain sectors are under stress and others (pharma, infocomms, digital) are facing a positive shift in demand for their products and services.

Due to COVID-19, businesses have transformed what they do and how they do it at a record pace. Planning for what’s next in business has never been so important. Working with legal and professional experts across our group, we have collected a range of insight, tools and guidance to help organisations to build resilience over the months ahead, to survive the challenges which the pandemic will continue to create and to thrive in the new environment beyond Covid

On 31 December 2020 the Brexit transition period came to an end, requiring fundamental changes to the way companies manage their workforces, international distribution networks and regulatory compliance. It remains to be seen what the full impact of this huge change will be, but one thing is certain – organisations will need to take action to prepare for business after Brexit

There is also the spectre of upcoming tax change. Following the review of the capital gains system which the Chancellor asked the Office of Tax Simplification (OTS) to carry out in July 2020, there are concerns that CGT rates may double and CGT allowances will fall. The proposed changes could see CGT being brought in line with income tax which could halve the net proceeds of selling shares in a company. This has led to many shareholders considering whether they should sell before March and so bringing forward deals planned for later in 2021 or 2022. We have also seen a surge in business owners considering the sale of their business to an Employee Ownership Trust which can bring significant tax incentives, if completed correctly.

This flurry of M&A activity is likely to continue until March but what happens after that is, rather unhelpfully, anyone’s guess. To say corporate deal activity in 2020 was unpredictable is an understatement. One thing that we can expect is for that unpredictability to continue beyond spring 2021. With enormous Government spending to deal with the impact of COVID-19 needing to be paid for, tax changes seem inevitable, and the Rishi Sunak effect on taxes will be hard to ignore.

So, more than ever, professional advisers within the UK deal market need to be agile, commercially-minded and responsive to change. These are traits that are heavily engrained within Gateley’s dealmakers and we are looking forward to continuing to get deals over the line throughout 2021.

Keep scrolling to see some of our key deals completed throughout 2020 and click the button below to download our full 2020 corporate deal list. 

Our year in Private Equity

In correlation with the trend seen nationally, the percentage of our deals involving private equity funding increased during the last 12 months to 34%. We were named as a finalist for Regional Legal Adviser of the Year at The Private Equity Awards 2020. We advised valued long-standing PE client, LDC, on several significant transactions this year, including its £90m exit of tech company, Babble. Another highlight was acting on the sale of a 21% stake in Gymshark to private equity firm, General Atlantic. The valuation of Gymshark in this transaction saw them join an exclusive list of fewer than 25 British companies to have secured unicorn status since 2001.

In correlation with the trend seen nationally, the percentage of our deals involving private equity funding increased during the last 12 months to 34%; we were named as a finalist for Regional Legal Adviser of the Year at The Private Equity Awards 2020. We advised valued long-standing PE client, LDC, on several significant transactions this year, including its £90m exit of tech company, Babble. Another highlight was acting on the sale of a 21% stake in Gymshark to private equity firm, General Atlantic. The valuation of Gymshark in this transaction saw them join an exclusive list of fewer than 25 British companies to have secured unicorn status since 2001.

Our year in Mergers & Acquisitions

Despite it being such a strange and unpredictable year, our M&A team advised on several notable deals throughout 2020, with Q4 being a particularly busy time for deal-making across our offices. Highlights included advising The Watches of Switzerland Group on its acquisition of several stores from Fraser Hart for around £31.7m; and of course our own acquisitions of built environment consultancy Gateley Vinden and reputation management specialists Gateley Tweed. We were shortlisted for numerous Insider Dealmakers Awards across several regions this year. 

Despite it being such a strange and unpredictable year, our M&A teams advised on several notable deals throughout 2020, with Q4 being a particularly busy time for deal-making across our offices. Highlights included advising The Watches of Switzerland Group on its acquisition of several stores from Fraser Hart for around £31.7m; and of course our own acquisitions of built environment consultancy Gateley Vinden and reputation management specialists Gateley Tweed. We were shortlisted for numerous Insider Dealmakers Awards across several regions this year. 

Our year in Equity Capital Markets

During an overall sluggish year for total deal numbers, our Equity Capital Markets team completed a number of noteworthy deals, including a firm placing and open offer of shares on AIM for Inspired Energy Plc, which raised over £31m to finance their acquisition of Ignite Energy. We also advised Global Fintech Holdings Limited on the US$25m sale of its wholly-owned subsidiary, GFH Intermediate Holdings Limited, to US-based MICT Inc, as well as on admission to the Nasdaq Stock Market. Following-on from advising on their IPO in 2018, we acted for Trackwise Designs Plc on its 2020 acquisition of Stevenage Circuits Limited, funded by a share placing on AIM, as well as its subsequent oversubscribed AIM fundraising.

During an overall sluggish year for total deal numbers, our Equity Capital Markets team completed a number of noteworthy deals, including a firm placing and open offer of shares on AIM for Inspired Energy Plc, which raised over £31m to finance their acquisition of Ignite Energy. We also advised Global Fintech Holdings Limited on the US$25m sale of its wholly-owned subsidiary, GFH Intermediate Holdings Limited, to US-based MICT Inc, as well as on admission to the Nasdaq Stock Market. Following-on from advising on their IPO in 2018, we acted for Trackwise Designs Plc on its 2020 acquisition of Stevenage Circuits Limited, funded by a share placing on AIM, as well as its subsequent oversubscribed AIM fundraising.

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