Azets: The pandemic didn’t impact deal flow as much as expected

Rob Holmes (pictured), a corporate finance partner for specialist local accountants and business advisory group Azets, answers a series of questions about the firm's sponsorship of the Solent Deals Awards, picking the best of the best in the region, what it is one should look for in a winner, and what the general trends in the sector are.

Described as the major south coast corporate finance event of the year, the Solent Deals Awards will return on 24 March 2022, bringing together corporate finance advisers, lawyers, bankers, private equity investors, accountants, and funding specialists who are contributing the most to dealmaking in the Solent and South Coast.

What has been your main motivator to sponsor the Solent Deals Awards?

We are fortunate to have worked with most of the prominent corporate and commercial teams locally. We have generally worked very well together, often sharing long hours on complex projects to get the transactions done. Sponsorship of the Solent Deals Awards is an opportunity to thank those who we think go above and beyond. We feel well placed to appraise having worked with many local firms.

What kind of qualities does a team need to take home an award from this event?

There are lots of technically capable corporate lawyers in the local market. In my mind, the best are those who can convey complex issues in a simple and easy to understand manner. This is important because many clients (especially sellers) will not have been through a transaction before, so clear and succinct guidance is key. The highest standards of integrity and doing what’s right for the client is also paramount, even if this means this advice does not maximise fee income!

What were the challenges your company faced during the pandemic and how did you overcome them?

Whilst we all learned how to use Microsoft Teams quickly, enabling us all to go on with our day jobs, the human connection is lost when communicating over Teams. Post lockdown, we have made every effort to meet up as a team, if only for a social lunch, beer etc and this has really helped with morale.

Can you name some of the recent trends in the accountancy sector in the South East region this year?

The pandemic didn’t really impact deal flow as much as we might have been expected. In fact, the threat of an increase in CGT earlier this year actually caused an artificial spike in deal volumes as sellers rushed to complete transactions before CGT rates were expected to rise (in the end, they actually did not!). More recently, we have seen the impact of Brexit – staff shortages, parts and component shortages especially when sourced from overseas; and price increases of parts and labour. This has created a two-speed economy – those impacted by these factors and those that are not (e.g. software businesses). 

There remains a large amount of cash in the system, particularly from institutional investors, and this cash is finding homes in those quality businesses that are not affected by Brexit.

Sectors doing well are green energy and renewables, software/tech, healthcare and recruitment. High-quality businesses in these sectors are actually seeing an increase in valuations, as there is a “flight to quality” particularly of p/e money. We are receiving lots of interest in transactions, so expect 2022 to remain busy, but there remain concerns over the wider economy as Brexit-related factors continue and customs duty etc bites.