BDO UK is expecting a tough year for corporate
finance despite research predicting renewed optimism will prompt a
surge in M&A activity over the next 12 months.

The BDO research involved 100 interviews,
carried out between January and March, with senior decision-makers
involved in acquisitive mid-market UK companies.

It found 80 percent of mid-market corporates
were planning acquisitions in 2010 and setting targets to acquire
an average of 2.5 companies.

Two-thirds of companies will look to
independent advisers as a source of specialist knowledge,
additional expertise and for independent and objective advice this
year.

 

Good news

BDO UK corporate finance partner Brent Goldman
said the research findings are good news and more positive than the
firm had anticipated.

The corporate finance businesses of
professional services firms have been hit hard worldwide by the
financial crisis as a lack of credit and market confidence has
halted business transactions.

Goldman warned that 2010 is still going to be
a tough year for corporate finance businesses.

He expects BDO’s corporate finance line will
grow compared with 2009, but will not reach near pre-credit crunch
levels.

“The key thing for corporate finance activity
is stability in the marketplace and I think there is a lot more
visibility around economic growth, although it is flat,” Goldman
said.

“Perhaps some of the larger economic scares
are behind us so people are able to plan a bit more for the future,
which does flow through.”

Goldman is not expecting a lot of extra
business to flow through until after the European summer as the UK
general election and the summer holidays will slow things.