Well-established London law firm, Joelson, is reporting that they have experienced a growing number of US firms taking an interest in UK tech firms – leading to a growing number of global transactions.
In the last few months, the top-ranked firm has dealt with three significant deals between UK tech firms and US Investors.
Amongst the deals that Joelson assisted US clients with include the sale of a British computer maintenance specialist with more than 25 years of experience in the UK market, a development and engineering company specialising in designing and building electronics for autonomous warehouse vehicles and the purchase of one of the UK’s leading specialist graphics, creative design and platemaking companies.
Joelson’s Chairman and head of the Corporate and Commercial team, Sheldon Cordell, believes there are several reasons for the sudden interest in the UK and in particular its tech and IT firms.
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“Brexit and the devaluation of sterling have had a big part to play in this boom from the US, but there is more to the story than just a sudden fall in the value of UK companies,” said Sheldon. “In most cases the deals we have worked on were already under consideration, but Brexit has acted as a catalyst and we are already receiving more enquiries.”
However, he added that other factors were at play that needed to be considered, amongst them the expertise held by the UK’s tech firms.
Sheldon said: “In a number of the deals a key driver for the sale was the management teams within the businesses being sold and their experience of the UK and European markets.
“It would be fair to say that US firms recognise the opportunities available and have a strong belief in certain sectors of UK industry, particularly tech and manufacturing.
“It is an excellent strategic opportunity to enhance their own understanding and buy into some exceptional British management teams.”
He also believes that the UK still offers overseas business excellent access to Europe, despite the Brexit vote.
“The UK benefits from having fair and understandable employment law regulations in comparison to the rest of Europe, which makes the country more appealing to US businesses,” added Sheldon.
“Americans are definitely competitive buyers and where they see competition coming from China, Japan or elsewhere they will invest quickly to ensure that they secure their space in the market,” added Sheldon.
He said other considerations, such as the Chinese clampdown on capital leaving the country implemented by the State Administration of Foreign Exchange (SAFE), had presently put the US in pole position for buying UK firms.
“Going forward a lot depends on two things, how the Brexit negotiations pan out and who we are going to be negotiating with and whether US firms are willing to hedge their bets and take advantage of the tactical opportunities in the UK” said Sheldon.
“While some large institutions such as banks and investment firms may move some of their operation overseas, I think in the main the UK has a very successful future ahead of it.”