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The first quarter of the year saw 367 disclosed deals in the mergers and acquisitions (M&A) market, 15 per cent fewer than the 432 disclosed in the same period last year. The total value of these deals fell from £18.8 billion to £11.8 billion, a decline of 37 per cent, according to research from Baird, a mid-market investment bank.

However, average transaction values did not fall dramatically. For deals worth less than £50 million, the average deal size fell five per cent to £10.6 million last quarter; between £50 million and £250 million, the figure fell nine per cent to £105.7 million; while deals worth between £250 million and £500 million had an average value of £358.6 million, diminishing only one per cent.

According to Baird, the most significant aspect of the data is the fall in deal volumes at the larger end of the mid-market. Only eight transactions worth between £250 million and £500 million occurred last quarter, compared to 20 in the same period of 2007. The total value of all deals in that band was correspondingly down 60 per cent, to just £2.9 billion compared with £7.3 billion last year.

Meanwhile, the lower end of the mid-market remains relatively ‘buoyant’, according to Baird, though it remains to be seen how much of this is due to sales being brought forward to avoid the rise in capital gains tax introduced in the Budget this month.

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