The second quarter of 2013 has seen an increase in the merger and acquisition activity taking place in Guernsey.
Appleby's latest edition of Offshore-i, the firm's quarterly report which provides data and insight on merger and acquisition activity in major offshore financial centres, has reported positive signs of a gradual return to more stable transactional activity following several years of volatility and a renewed confidence in offshore transactions. It shows that deal volumes in Guernsey were up by 16% on Q1 to 66 transactions and that in the global IPO market Guernsey incorporated companies were involved in 4 of the 17 IPOs that completed in Q2, while of the 22 planned IPOs, the largest deal on the London Stock Exchange involves a Guernsey incorporated closed-ended fund looking to raise US$200m.
We are encouraged to see the general robustness of the deals announced in Guernsey in Q2," said Jeremy Berchem, Appleby's Practice Group Head for the Corporate and Commercial department in Guernsey.
Guernsey continues to strengthen its position in the global financial marketplace and with volumes up by 16%, the latest figures underpin the continued confidence of managers to domicile their funds here. Globally, the number of deals has started to form a pattern averaging out around 500 per quarter in five of the last six quarters and so far this year we have seen 493 deals in Q2 and 491 in Q1. We feel comfortable asserting that business confidence is at last returning to the markets.
At US$64m. for Q2, average deal size is higher than it has been for five of the last eight years. The offshore region average is also higher than all other regions except for North America at US$119m. and Central and South America at US$109m."
When we look at the contribution of the top 10 offshore deals to overall activity in Q2, we see that they accounted for just a third of the cumulative deal value overall, as they did in Q1. We believe that this gives further reason for optimism as values for past quarters have been distorted by one-off mega deals. We can now see genuine substance returning to the mid-market and activity returning across the spectrum of business sizes. Transaction sizes show tangible signs of settling at pre-boom levels, on a par with 2006 data, when US$61m. was spent on the average transaction."
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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