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Last year’s fourth quarter was the quietest deal-making period for the private equity industry in half a decade. In a single quarter, the value of buy-outs fell massively—from £15 billion to £3 billion. At the top end of the market, not a single deal above the £1 billion mark was completed.

M&A practitioners have always been lured by overseas markets. With the current downturn in domestic deal-making, these not-so-distant lands are now even more appealing. Groups such as the Mergers Alliance Network, set up by mid-market M&A adviser Catalyst Corporate Finance in 1999, have been created to facilitate cross-border M&A by improving access to overseas buyers and local knowledge.

At the Network’s launch almost a decade ago, cross-border M&A activity was centred in Continental Europe and the US. Most members were French, Italian, Spanish or German independent mid-market corporate finance advisers.

Mirroring the breadth of recent cross-border activity, the Network’s members now come from 22 countries.

Last year it advised on 100 M&A deals worth a combined total value of €4 billion (£3 billion). Local knowledge made readily available within the group enabled completion of the transactions, many of which were complex.

This type of knowledge sharing among M&A mid-market advisers has led to recent deals, such as LDC’s sale of Aqualux, a Wednesbury-based designer and manufacturer of bath screens and shower enclosures, to Swiss company Arbonia Forster Holdings. In addition to being a great example of overseas investment, the £23 million deal shows how an international bathroom equipment producer can diversify away from the building products sector and find a route to market in the UK.

Outbound UK cross-border M&A activity jumped to £177 billion (587 deals) in 2007, up from £67 billion (518 deals) a year earlier, according to data provider Mergermarket. And the prominence of cross-border acquisitions can only increase as groups like the Mergers Alliance Network engage with other advisers, get to grips with cultural differences and meet the right people. In short, they are knocking down the barriers to international trade.

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