Merger and acquisition activity is to surge among the UK's small-and medium-sized enterprises (SMEs) next year, after a new survey indicated that one in ten are considering making an acquisition in the near future.
The figures from the invoice and asset-based lender Venture Finance, have shown that the activity will likely be in line with the predictions made by the Bank of England. The lender surveyed 500 SME business leaders to obtain the statistics, which also showed that a quarter of the ten per cent of companies planning to make acquisitions aim to do so within the next six months.
More than a quarter of all the businesses surveyed revealed that they have the financial means to currently realistically consider making an acquisition, with the average war chest of SMEs amounting to £190,000.
The main obstacle standing between these businesses and actually taking over another one, however, is a lack of experience in deal-making. A third of companies said they had no idea how to commence an acquisition or merger, while 35 per cent said they would not know how to position themselves correctly.
Venture's Steve Websdale explained, "Despite the potential, many SMEs appear to lack the experience required to undertake a smooth acquisition or sale. This could lead to poorly structured deals and financial headaches for first time buyers."
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