More than 90% of firms acquired in Wales over the last 26 years remain operating in the country, according to a new report that challenges the narrative that ownership exits lead to businesses being hollowed out or moved elsewhere.
Cardiff-based boutique corporate advisory firm Gambit analysed more than 2,000 exit deals in Wales from 2000 to 2025. The analysis shows that following a change of ownership, more than 90% of firms remain actively trading in Wales.
Trade sales dominate exit routes
The most popular exit route over the period was a trade sale, with 74% of shareholders choosing this option. The second most popular was a management buyout (MBO) or management buy-in (MBI), accounting for 21% of deals surveyed. Notable MBO/MBI exits included the MBO of Pembrokeshire holiday resort Bluestone Resort in 2013 for £87m and the MBO of Flintshire-based supermarket chain Iceland in 2020 for £115m.
There were 29 deals valued at more than £100m. The highest, at £3bn, involved the sale of the assets of the former listed utilities group Hyder. During the 26-year period, South East Wales accounted for 61% of all Welsh exits, South West Wales 22% and North Wales 17%.
IPO activity and exit trends
There were 34 flotations during the period, with the largest IPO being Admiral’s £368m flotation in 2004. During 2000-2011, 55% of exits involved businesses less than 10 years old. This dropped to 38% between 2012 and 2025. Gambit said this was symptomatic of the lack of available liquidity during a prolonged recession and market uncertainty around Brexit.
At 57, the average shareholder age at exit has been rising over the past decade. This may indicate that external factors, such as Covid-19, have delayed owners from transferring their businesses.
Myth put to bed
Frank Holmes, founder partner of Gambit, said: “It’s a myth we can finally put to bed. There’s a persistent assumption in Wales that when a local business is bought, it gets hollowed out: the business relocates, the jobs go.
“We individually checked what actually happened to over 2,000 exits across 26 years. Around 90% of genuinely Welsh companies that were acquired are still active and trading in Wales today. Change of ownership isn’t the threat people assume it to be, particularly for buyouts and IPOs.”
The research shows exit activity in the second half of the period – 2013 to 2025 – comfortably outpaces the first half, with 1,251 exits against 843, representing an average of 96 exit deals a year versus 65.
Budget impact and employee ownership trusts
Mr Holmes said: “Whichever way you cut it, the Welsh market has been getting busier, not quieter. A catalyst for the spike can be attributed to the October 2024 Budget. Capital Gains Tax (CGT) rose immediately on its announcement and continued in 2025 and 2026.
“That’s a strong incentive to complete a sale before a deadline, and we know from our own activity it pulled a good deal of transactions forward into 2024 that might otherwise have been executed a year or two later. However, it was also four years post-Covid, which allowed companies to regain financial performance and improve valuations, thereby demonstrating the sustainable profitability necessary for exit, fortuitously in a strong, liquid market.”
The research shows 50 firms were acquired by employee ownership trusts (EOTs) - a structure that provided 100% CGT relief for sellers. Mr Holmes said the EOT exit route could well have peaked.
He said: “The maturation of the employee ownership trust option became increasingly favoured for predominantly people-services companies, with over 50 transactions in the period. This option benefited from the 100% CGT allowance or nil-rate tax incentive, since halved, which was compelling for owners but often funded with revolving debt structures, compromising growth potential. The jury is out on the sustainability of some of these businesses, as some notable failures have already emerged.”
On business owners considering an exit, or a partial one, Mr Holmes said: “Selling up should not be viewed as being a threat to their legacy and the economic wellbeing of their employees and other stakeholders, as it’s sometimes made out to be. It is an important factor in the lifecycle of a business, often left unaddressed and best approached in a planned fashion.
“An ageing generation of owners is going to drive a lot of succession decisions over the next few years. Those businesses which have a succession plan will be the ones that make themselves genuinely investable, by adopting tech and innovation-led strategies, cultivating credible management, thereby creating capacity to grow and understanding the optimum routes for exit, well before making a decision to embark on a transaction process.”
