Monday 13 January 2020 12:01 am

Value of takeovers of AIM companies rises a third in 2019

Takeovers of AIM-listed companies rose 32 per cent in value last year, thanks to a growth in the number of buyers acquiring fast-growing fintech firms listed on the index.

According to accountants UHY Hacker Young, the value of such takeovers rose from £2.2bn in 2018 to £2.9bn in 2019, aided by a resurgence in the takeovers of oil and gas companies.

Read more: Total value of UK M&A deal rises by £15bn in 2019

The largest individual takeover was that of mobile advertising provider Rhythmone, which was purchased for £225m by Israeli rival Taptica.

The second largest was Visa’s acquisition of Earthport, a payment services business, for £205m.

Total fintech acquisitions almost doubled in value, increasing to £907m from £481m in 2018. The total number of such takeovers also doubled over the course of the year, from five to 10.

The oil and gas sector saw over a £1bn worth of acquisitions over the course of the year.

The rise in acquisitions of AIM listed tech and fintech businesses reflects the increasing reputation for innovation of the UK’s tech clusters, such as London’s Silicon Roundabout and Cambridge.

UHY Hacker Young adds that a large number of takeovers of AIM businesses in the past year were driven by overseas businesses seeing AIM companies as valuable strategic acquisitions. Five of the 10 takeovers of AIM-listed fintech and tech companies in the past year involved an overseas buyer.

Laurence Sacker, managing partner at UHY Hacker Young, says: “These figures show that AIM works well as an incubator of tech and fintech companies.

“Tech companies listed on AIM do attract supportive shareholders and allow founders and shareholders to exit at attractive valuations. There is no need for tech companies to stay private for them to achieve that.”

He finished: “If a foreign tech company is looking to scale up AIM is now one of the leading destinations.”

Read more: Rush of large AIM listings causes fee fall

In the terms of the number of takeovers, the AIM market has outperformed the main market.

While M&A deals on the Main Market fell 18 per cent from 22 in 2018 to 18 in 2019 AIM takeovers remained steady at 27 in both 2019 and 2018.