The value of private UK companies acquired in the last 12 months slipped 19 per cent to £19.5 billion; down from £24 billion last year, says accountancy firm UHY Hacker.

Despite the drop in values of private companies involved in M&A, this figure compares favourably to the effect the credit crunch is having on M&A involving larger listed entities. Recent figures from the Office for National Statistics reveal that the value of all UK M&A deals, including listed companies, was 28 per cent.

UHY Hacker Young claims this indicates that the market for acquisitions of small and medium-sized companies is proving to be more robust.

Chris Lowry, partner at UHY Hacker Young, said: “The credit crunch has meant that the confidence of many companies has taken a severe beating. With economic growth sliding to a halt, potential purchasers are feeling far less bullish about being able to make an acquisition work.”

He added: “Small and medium-sized private company M&A activity, however, is certainly not being as adversely impacted as listed-company M&As. Acquisitions of private companies are normally made at much more conservative multiples of earnings and free cash flow so banks are more willing to fund them.”