Capital gains tax fears sparks M&A broker boom

The spectre of rising capital gains tax sparked a month-long wave of broker consolidation, dubbed a ‘month like no other’.

M&A specialist, IMAS revealed that this year 25 deals between the £5m and £25m valuation have taken place  – with the majority finalised in the month to 2 March, just before the Spring Budget. 

This compares with just 19 deals during the whole of last year.

Leading the way is Aston Lark, which snapped up five brokers and took onboard 221 staff. 

’Pyrrhic victory’ 

The most sales came from broker owners between aged 55 and 59 years old.

Just over half sold were commercial brokers, with the rest being Lloyd’s brokers, MGAs and personal lines.

However the rush to sell meant many brokers failed to achieve the best deal.

IMAS, in its M&A newsletter special going out this week, it stated: ”In beating the [Spring] Budget many vendors have scored a pyrrhic victory.

“In their rush to complete a transaction before the 3 March they often did not spend enough time looking at all of their options, in order to secure the best fit or transaction terms. Many did not take advice and will have inevitably failed to achieve the best deal they could have.

”The current range of buyers has never been wider and while to an outsider they might look very similar, they all have their own DNA. Their future destinations are also very different.”