AIM has long been regarded as Europe’s most successful growth company market, however, it is also a hive of mergers and acquisition activity – as new research from Business XL magazine reveals.

As Business XL reports, the year to November 2004 saw the ownership of 19 AIM companies change hands in deals worth a combined £1.44 billion. This compares with 32 deals worth a total of £573 million in 2002/03.

Largest among the deals completed in 2004 was the £832.4 million management buy-out of property group Peel Holdings. Peel was not alone in attracting acquisitive interest, though. Also luring the buyers were pizza and pasta restaurant chain ASK Central, purchased by the privately held Riposte for £212 million, and Online Travel, which was bought by fully listed e-tailer lastminute.com for £54.9 million. The nature and volume of these deals helps to dispel the myth that AIM is purely the preserve of smaller companies.

Online Travel was one of just five firms purchased by a fully listed rival. Of the others, AIM-listed groups acquired seven, four were bought out by privately held entities and the remaining three businesses were taken private by their management.

Business XL’s research also reveals that around 80 AIM firms currently subscribe to a ‘buy-and-build’ growth philosophy: the idea being that they will use either cash or shares to complete a series of transactions, usually in a related sector, and then strip out overlapping costs to boost profits. Each of these companies is potentially an active player in the acquisitions market, as are the 60 empty cash shells listed on AIM at present, with combined cash reserves of £77 million.

In terms of potential takeover targets, 34 AIM firms have stated that they are undertaking a strategic review of some sort. In some cases this will almost certainly lead to various business being divested.

Business XL’s research was conducted in conjunction with accountancy and corporate finance specialist KPMG. An extensive (18 page) report is available – priced £195 + VAT. To order your copy call 020-7430 9777 or click here.