Spending review fears to halt deal activity, says PwC
The traditional flurry of end-of-year deal completions may be bumped into the New Year, according to deal market experts at PricewaterhouseCoopers (PwC). The early months of 2011 could instead be hit by a wave of completed deals, due to the uncertainty surrounding the government’s forthcoming spending review.
PwC experts said that whilst pent-up deal activity is expected to generate some completions before the end of the year, the majority “will not be sufficiently advanced” to complete before the start of 2011.
The professional services firm is predicting that increased certainty in the marketplace following the spending review announcements on 20 October could act as a catalyst for regional deals.
Russell Worrall, partner and transaction services expert at PwC in the Midlands, said: “Midlands companies have continued to attract strong interest from trade buyers and increasingly from private equity investors over the summer months, despite the pervading uncertainty about the impact of the impending public sector cuts.
“As a result, we are expecting some pent-up deal activity to begin to convert as certainty is restored to the marketplace following the government’s announcements. However, where deal negotiations are at an early stage and due diligence is only just beginning, it is unlikely that a transaction will be completed before the end of the year.”
