The number of M&A deals in the first quarter of the year were down overall, but smaller transactions hit their highest levels since 2008, according to Experian.
Both the equity capital markets (ECM) and M&A market were dominated by sub-£10m deals in Q1 2013, which increased by 6.3 per cent, from 319 deals in Q1 2012 to 357 deals in Q1 2013.
Experian said the increase can be attributed to a "substantial upturn" in the volume of smaller-scale equity fundraising from UK public companies, which increased transactions from 116 worth £225m in Q1 last year, to 225 worth £334m in Q1 this year.
However, the total number of M&A and ECM deals recorded in Q1 fell by 14.2 per cent, from 1,239 transactions in Q1 2012, to 1,063 in Q1 2013.
The value of deals also dropped in the quarter to £40.5bn, compared with £80.6bn in the same quarter last year. This is due to significantly fewer "very large" deals, Experian said.
Breaking the figures down into sectors, IT-based acquisitions accounted for 10.9 per cent of the overall number, according to the market watcher. The most active sector was the UK financial sector, which accounted for just under 30 per cent of deals in the quarter.
However, despite the overall fall in M&A volumes, the UK performed relatively well internationally as well, Experian claimed.
In other regions: deals in the Asia-Pacific region were down by 32.6 per cent in volume and 37.5 per cent in value. In the US, activity dropped by just under 27.7 per cent, but transaction worth increased by 35.4 per cent. And there was a UK element in more than half (51.3 per cent) of all European transactions, up from 44.7 per cent in Q1 2012, with the UK contributing almost 40 per cent of total in terms of value.
Wendy Driver, business development manager at Experian UK&I, said: “2012 was a busy year with high-value, top-level corporate transactions characterising deal making in the UK.
“The first quarter of 2013 has seen smaller transactions dominate as SMBs continue to strive for growth with brisk activity in the professional services and IT sectors. Despite the low deal volumes in the UK market so far this year, the UK has played a key role in more than half of all European deal activity in Q1, which is encouraging as it indicates the appetite for deal making remains strong.”
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