UK entrepreneurs have "shelved" M&A deals

24/09/2009 UK entrepreneurs have

The majority of entrepreneurs in the UK have postponed plans to carry out mergers and acquisitions (M&As) and intend to use their operational cash flow to fund major business projects over the next year, according to a new Deloitte study.

Research by the audit jobs provider revealed that 53 per cent of such business owners will use this as their primary source of funds, up from 36 per cent in 2008.

Money from banks will be used by 18.5 per cent of respondents, while 10.4 per cent will rely on existing shareholders and 12 per cent will be seeking external investment from private equity angel investors and venture capital.

Corporate finance partner at the Big Four company Paul Zimmerman said M&A plans have been "shelved" by many entrepreneurs.

"Instead, their prime focus is on strengthening the operational performance of their business to emerge as 'winners' from the recession and this requires investment," he noted.

Grant Thornton recently noted that the number of domestic M&As taking place in the UK has dropped to the lowest level since 1991.

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