Insider Media Limited

2011 is set to be the best year for entrepreneurs to sell their businesses since the recession began, according to dealmakers at Birmingham-based Clearwater Corporate Finance. The comments come as the firm reported a 47 per cent rise in deal activity in 2010 compared to the previous year.

Clearwater attributed the boost in activity to favourable tax conditions for individuals and escalating interest in UK companies from overseas trade buyers.

The total value of deals that Clearwater advised on rose to £556m in 2010, compared with £378m in 2009. This increased the firm’s average deal value to £24m compared with £22m in the previous year. Clearwater advised on 24 transactions in total in 2010.

The most active sector for the firm in terms of volume was support services, accounting for 40 per cent of deals. Clearwater also advised on three transactions in each of the technology, healthcare, consumer and chemicals sectors.

Fifty–two per cent of deals that Clearwater advised on had some form of private equity involvement.

Phil Burns, managing partner at Clearwater in Birmingham, said: “2011 presents a great opportunity for entrepreneurs to realise the value in their businesses. Pricing is stabilising and tax conditions for individuals are becoming increasingly favourable.

"Crucially, private equity houses still have large funds to invest in strong businesses and we are likely to see even more competition between them for the best sector targets this year.”