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M&A activity set to rise

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Mergers & Acquisitions activity among small to medium-sized businesses is expected to rise, according to a new study.

A survey by Venture Finance revealed that one in 10 SMEs are actively considering acquiring a competitor.

And 25% of 500 business owners and directors polled claimed they already had enough capital to swoop on a rival.

Businesses keen on making a move in the M&A marketplace are sitting on an average of £190,000.

However, the research also suggested inexperience in buying businesses could hamper deals.

More than three quarters of SMEs have never acquired a company before, while a third also admit to having no idea of how to approach a target or engage in a merger. 

61% said they would need external advice when looking for a business to buy.

Venture Capital director Steve Websdale says: "Despite the potential, many SMEs appear to lack the experience required to undertake a smooth acquisition. 

Despite the potential, many SMEs appear to lack the experience required to undertake a smooth acquisition

Venture Capital director Steve Websdale

"This could lead to poorly structured deals and financial headaches for first time buyers."

Nevertheless, the prospect of increased M&A activity will provide New Year cheer if you want to sell your business.

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Fifty-six percent of aspiring buyers won't let a lack of experience in the hotel sector prevent them from purchasing a business, so finds the latest BusinessesForSale.com survey.

Bob Cotton, former CEO of the British Hospitality Association, advises would-be hoteliers to talk to an existing owner first, saying: "They will tell you stories of guests that will make your hair curl."

But even better, he adds, potential buyers should stay in a hotel for a fortnight to "Get the feel of an industry on show every day of the week. They'll soon learn whether running a hotel is for you."  

A sense of humour and deep conviction are needed to run a hotel business and Cotton further notes that would-be buyers should recognise that they can't please everyone.

He concludes that "the art lies in wanting to try."

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Meanwhile household brand Fray Bentos has a new owner.

Scottish food group Baxters has acquired the pie manufacturer for an undisclosed sum from Princes Limited.

Launched in 1899, Fray Bentos is known for its range of canned meat pies, including steak and kidney and minced beef and onion.


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