An audience of local business people gathered at the Sefton Hotel last month to hear from a series of experts on different aspects of mergers and acquisitions. The Transactions Seminar was delivered by local accounting firm KPMG, and particularly highlighted the continuing growth of confidence in the marketplace.
Russell Kelly, Director at KPMG Isle of Man, set the scene by arguing that the first positive signs were starting to show since the Lehman Brothers collapse in 2008, which shook the market. He observed that global deal volumes have remained consistently low in recent years, and that large stores of cash are being built up, particularly in the private equity business.
Speaking on the local industry, Russell commented: “The Island has seen a lot of activity in the CSP market in recent years, particularly as larger players try to ‘leverage the multiples’ of buying and integrating smaller business. Succession planning has also been a key driver in smaller markets such as ours, Gibraltar and the Channel Islands. However, from a more global perspective there is certainly more activity in the East and a number of CSPs are quite rightly looking towards Hong Kong, Singapore and Dubai.”
Mr Kelly was also bullish regarding recent figures on the London Stock Exchange, and noted that there was still a lot of private equity funded structures with significant debt in the market that would have to be refinanced over the next few years.
A series of speakers followed Russell’s introduction, each detailing a different area of the M&A market and considerations for those involved. Ed Houghton, a Senior Manager in Transaction Services at KPMG, commented on some of the details of executing a transaction and particularly how to maximise deal value. He was followed by Greg Jones, Taxation Director, who spoke on the tax implications of buying or selling a business. Greg focussed particularly on the challenges and opportunities of tax planning within a ‘tax morality’ milieu.
Sinead O’Connor, Senior Manager, Regulatory and Compliance, expanded on Greg’s comments by specifically looking at regulatory considerations and where responsibility sits – with buyer or seller. Micky Swindale, Associate Director, People and Change, then wrapped up the seminar by covering the human aspect of takeovers and transitions and warning that failure to manage cultural and people integration can lead to rapid loss of value in the combined business.
KPMG provide regular updates on matters of interest to the Island’s business community, on a range of topics. The full presentation, ‘Realising Value: A Guide to Mergers & Acquisitions’, is available online at www.kpmg.co.im.