Political clarity has finally brought a bounce for dealmakers - Chris Stott

After months of uncertainty, the General Election provided the market with clarity. We’re now in the midst of a deals bounce worthy of raising a glass to.

Fundamentally, some confidence has returned. The relative visibility that management teams have on the future direction of the economy, political landscape and our relationship with Europe has shifted the mood music amongst dealmakers.

Long before anyone could head off for Christmas or sing Auld Lang Syne, we were already speaking to businesses and management teams. Many had done their preparation and were poised to progress their plans once they had some clarity from Whitehall.

There have already been two considerable investments in Yorkshire businesses – Sun Capital’s investment in Allied Glass, which manufactures glass packaging containers for the premium spirits and food and drink industry, and LDC’s backing of Global Auto, the independent corporate mobility and fleet management provider.

But trading conditions are still fragile and could change at any moment – considering some of the underlying challenges facing global economic trade and growth. So there is an acknowledgement that we are possibly entering a window to transact. This is something that will be felt right across the market.

At the larger end, we are likely to see a scramble for IPOs as those looking to the public markets want to get ahead of the queue. Corporates are also looking at the next few months as an opportunity to offload those non-core assets they’ve been holding on to. Battling for the best assets will be a hungry private equity community with considerable capital to deploy.

Government is also playing a role. It has clearly signposted its intention to drive further investment in the North of England, not least in infrastructure. There is a growing hope that Whitehall now recognises real opportunity to supercharge the UK regions and help get big infrastructure projects off the ground.

The bid to save North York Moors miner Sirius Minerals, as well as the finalisation of funding for wind energy farms in the North Sea and Humber, show that this is laying the ground for deals to get done.

Nor can we forget that the attention isn’t just domestic. International buyers are still coming to the UK – a suppressed sterling makes our investment opportunities attractive. Their interest will help keep values up and momentum going for what is already a competitive market for the best assets.

The swell of energy is palpable and encouraging. If anything, it is a welcome breath of fresh air to start the new decade. But, it shouldn’t be confused with a frenzy, uncontrolled or for the sake of getting a deal done. The drive to complete doesn’t just make strategic sense, but it is pragmatic and driven by a consideration for the future too.

There is a possibility that the Government shifts its tax policy focus from the end to the beginning of the entrepreneurial journey – all with the purpose of incentivising innovation and business investment. That might mean making changes to Entrepreneurs’ Tax Relief, which is why some vendors may be encouraged to the market to cash-out before the impending Budget.

Management teams are also looking ahead to what might come later in the year and the possibility of politics taking back the national agenda and clouding business planning. A concern that uncertainty will return might bring further M&A impetus to the next few months.

Quite simply, there is more reason to deal over the next few months than through the latter part of 2019.

It’s time to dust down those prospectuses, growth strategies and information memorandums and make the most of this opening. Otherwise, we might rue a missed opportunity.

Sounds like a fair New Year’s resolution to me.

By Chris Stott, the head of advisory at KPMG in the North