Private equity and UK tech powering £8.4bn M&A tsunami on LSE’s AIM as deals jump 155 per cent
The value of M&A deals on London’s Alternative Investment Market (AIM) has jumped 155 per cent to £8.4bn in 2020/21, compared to £3.3bn in 2019/20, according to new research shared with City PM this morning.
The large rise in the value of AIM M&A deals this year is due in large part to a number of high value deals for tech businesses.
The total value of tech M&A deals on AIM this year rose to £2.6bn, accounting for 32 per cent of the total value of all M&A deals on AIM. Acquisitions of tech businesses accounted for just 7 per cent of deals (£232m) on AIM the previous year, accountancy firm UHY Hacker Young told City PM
The sharp increase in the value of technology M&A deals shows that the AIM market is acting as a successful growth platform for tech companies. Many of AIM’s tech companies have become attractive targets for acquisition over the past two years, the firm stressed.
The highest value M&A deals for AIM-listed tech companies in the last year include video game developers Sumo Group (who created the game series Little Big Planet and Sonic Racing) acquired by Chinese technology conglomerate Tencent.
Also, American cyber security multinational Cisco Systems purchased IMImobile, who provide businesses with automated enquiry responses and chat-bots, for £540m.
Private equity
Many companies listed on AIM have become attractive targets for private equity bidders. Major private equity deals for AIM in the past year included Ancala Partners’ £341m purchase of waste services business Augean, DBay Advisors’ 75 per cent £240m purchase of Telit Communications, which provides Internet of Things software, and Flexpoint Ford’s £233m purchase of wealth manager AFH Financial.
“The past year has seen an M&A boom in the UK and AIM has played a big part in it,” Dan Hutson, Partner at UHY Hacker Young, told City PM this morning.
“Being AIM listed is an excellent platform for growth companies, helping them to raise capital and to move to the next stage of their growth through M&A,” he explained.
“Over the last year AIM has served tech companies particularly well, putting their success in the shop window. Both private equity and major tech multinationals are watching AIM to identify acquisition targets,” Hutson concluded.