The vast majority of business exit deals over the last 20 years has seen acquired firms continuing to trade in Wales, new research from Gambit Corporate Finance shows.
The Cardiff-based firm, using its own market intelligence and published deal data, has provided an analysis of deals over the last two decades.
Of the 1,400 exits that have been collated and analysed, over 80% of the acquired companies still remain active in Wales.
The research by Gambit also shows that in the build-up to the financial crisis and resulting recession deal volumes and values were trending upwards, peaking in 2007 with 133 reported exits achieving a cumulative total of £748m.
The average consideration for disclosed deals in Wales between 2003-2007 was £10.1m.
However, during the downturn period of 2008-2011, the average year-on-year fall in deal volumes was around 25%, while cumulative deal values fell by 50%.
Business exits began to recover in 2015, with deal volumes returning to pre-crash levels in 2019, achieving a cumulative disclosed deal value of £332.6m.
However, after the referendum to leave the EU disclosed deal values fell from £374.1m in 2017 to £179.1m in 2018.
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While there was an increase in the volume of management buyout and management buy-in exits, higher- value trade sale volumes declined.
During the 20-year period south Wales generated 89% of deal value with more than £4.2bn.
Notable deals included the trade sale of utilities group Hyder and the institutional buyout of Caerphilly-based PHS for £732m in 2005.
The largest exits outside south Wales were the de-listing of Deeside-based Big Food Group Plc, which was acquired by an investment consortium in 2004 for £688m and the flotation of Bangor-based Watkin Jones Plc in 2016 for £131m.
The most popular exit route over the 20-year period was via trade sales, with 71.4% of shareholders pursuing this option.
For deals below a value of £100m, the average disclosed trade sale was more than £11m.
Senior partner of Gambit Frank Holmes said: “A review of the current ownership of exited companies over the 20-year period reveals that out of over 1,400 exits that have been collated and analysed, over 80% of the acquired companies still remain active in Wales, dismissing the notion that change of ownership has a negative impact on the Welsh private sector.
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“Change of ownership for succession, new management and corporate longevity are dedicative of a healthy and stable business sector.”
Mr Holmes said the impact that Covid-19 had on Welsh business exits in the first half of 2020 was stark.
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Reported transactions fell dramatically as the country went into lockdown in late March and exits were delayed or put on hold.
On the outlook he added: “The anticipated changes to Capital Gains Tax [Rishi Sunak’s March Budget] has the potential to encourage shareholders to exit, however, these are likely to be concentrated in sectors that have been shielded from the stringent lockdown measures.
“Brexit uncertainty will continue to persist as the 海角视频 completes its own transfer out of the European Union.
“This may encourage overseas acquirers seeking to gain access to the 海角视频 market at favourable exchange rates for quality assets or distressed company acquisitions.”