The overall picture for industrial M&A activity remained broadly positive, despite the UK as a whole delivering a mixed economic and industrial performance. EEF manufacturing reports showed negative trends across a number of performance indicators, with investment, output and the export balance all showing negative growth trends.
The software sector continues to be defined by innovation and an ever-increasing battle to meet developing customer requirements. SaaS vendors are experiencing tightening margins as a consequence of increased competition and significantly higher cost of acquiring new customers.
Data utilisation continues to be the main driver for the internet of things movement. Companies are desperately trying to utilise the massive quantities of data available in order to make better informed strategic decisions. While the growth in Edge computing could increase the automation of data driven decisions going forward.
M&A activity in the food and beverage sector remained active with 61 deals completed in the second half of 2018, the highest deal volume since 2016. This is an improvement on the deal volume in H1, demonstrating the industry’s attractiveness despite the on-going uncertainty surrounding Brexit.
Strong levels of M&A activity have been supported by the continued resilience of the UK recruitment sector as a whole, with the latest REC (Recruitment & Employment Confederation) report showing an 11% increase in YoY turnover to £35.7bn in 2018.
Large corporates are looking to integrate low-code platforms with existing offerings to improve their service portfolio. The main challenge for low-code vendors is to add new technologies, such as machine learning, to keep up with the rapid development of business applications.
Merger and acquisition deal activity reached a post-recession high in 2016 and is on pace to exceed that total in 2018. The majority of deals occurred in the US, France, and the UK, with other developed European markets seeing significant deal activity in the space.
The consolidation of large international agri input players has already begun and this trend will continue in other segments as well.