Triple Play "Bid Fever": UK Tech's ability to scale and go global

The recent acquisition of three valuable UK technology companies – Spectris, Oxford Ionics, and Alphawave IP Group - by US buyers in multi-billion-dollar deals sparks significant discussions about our ability in the UK to retain and scale our prized innovative enterprises. This "bid fever" as described in The Times underscores both challenges and opportunities within the UK capital markets, and particularly in the technology sector. As a partner in a law firm deeply engaged in these dynamics, I’ve sought to collect my thoughts on what these recent deals mean for the UK technology landscape.

Revitalising the UK Capital Markets

The recent wave of acquisitions does highlight concerns as to the competitiveness of the UK's capital markets in recent years, particularly in our ability to support and retain high-growth companies. The “surprise” announcement by Wise, for example, to shift its primary listing to New York encapsulated these concerns. Recent reforms to the listing regime, including permission for dual class share structures, have helped but institutional capital outflows and liquidity issues continue to blight the market. We are now seeing further regulatory innovation through the PISCES sandbox. This is a new type of private stock market which will be launched later in 2025 after the FCA announced the final rules for its Private Intermittent Securities and Capital Exchange System (PISCES). As companies choose to stay private for longer, there is demand for investors to trade private company shares easily and efficiently in an organised marketplace. PISCES meets this demand by allowing secondary trading of these shares. Companies can set the floor and ceiling of share prices, and have a say over who can buy their shares.

Attractiveness of UK Technology Businesses

Despite the clear challenges to our capital markets, these deals clearly demonstrated that UK technology companies continue to attract significant interest from global investors, particularly from the US. The acquisitions of Spectris, Alphawave IP Group, and Oxford Ionics demonstrate the inherent value and innovation present within our thriving technology sector. Our innovative entrepreneurs are recognised for their cutting-edge technologies and potential for growth, making their companies attractive targets for international investment. The overall story for UK tech then, is still a positive one in an increasingly competitive market.

US to UK M&A

These deals also build upon a broader global trend of inbound US investment into the UK, particularly in the technology sector but we have also seen a similar trend for example in sports investment. The US influx does provide a viable financing route for the scale-up of our technology jewels which, provided management teams and HQ facilities continue to be UK based, with R&D still taking place here generating valuable IP, is a positive, providing these companies with a means to access to global markets and develop new expertise and innovations, enhancing our global technology credentials. Our Firm possesses extensive expertise in supporting founders, management teams and growth companies on cross-border M&A deals and investments and has seen this trend first hand. Whether it's advising sell-side or buy-side on strategic acquisitions/investments, our team is equipped to support clients in capitalising on these opportunities.

In conclusion, while the UK capital markets are facing a period of significant challenge, there are positives to be taken from the current environment; it presents significant opportunities for revitalisation and innovation, including via PISCES. The attractiveness of UK technology businesses to global investors remains strong, and our firm is well-positioned to support clients in navigating this dynamic environment. 

With our expertise in inbound US to UK M&A deals, we are committed to facilitating successful transactions that contribute to the growth and innovation of the UK technology sector and reward for our value creators (the founders and management teams with the vision). As the landscape continues to evolve, we stand ready to provide the legal and strategic guidance necessary to thrive in this exciting market.