The UK buy-out market has faltered in the first quarter of 2011
- following a promising and busy final quarter of 2010. The West
Midlands has largely mirrored the national picture - according to
figures released by the Centre for Management Buy-out Research
(CMBOR), co-funded by Barclays Private Equity and Ernst &
Young.
Figures released by CMBOR show that in the first quarter of
2011, there were 40 buy-outs/buy-ins nationally with a total value
of £3,216m, compared to 181 deals in the whole of 2010 - with
a value of £18,574m.
The West Midlands recorded six deals in the first quarter
compared to 11 in the whole of 2010 with a total value of
£57m compared to £800m for the whole of 2010.
Some regions, including the East Midlands, did not record any
deals during the first quarter of 2011.
The figures also follow the European buy-out market scene which
slowed in the first quarter after a surge in the final quarter of
2010. The UK and Germany continue to dominate the European
buy-out scene.
"The number of deals during the first quarter of 2011 is down on
the previous quarter but that is not surprising following the large
number of buy-outs completed in the last quarter of 2010," said
Paul Harper, investment director of Barclays Private Equity in
Birmingham.
"The good news is that the buy-out market is becoming more
active across all deal sizes and there is certainly a greater level
of early stage deal activity, an indicator that deal flow should
increase in the next quarter as private equity firms seek to both
invest and realise assets."
Secondary buy-outs were the dominant source of all UK management
buy-outs/buy-ins. Eleven secondary buy-outs were recorded during
the first quarter - compared to nine from family and private and a
further nine from local parent companies. The most active sectors
were business and support services, with nine deals, followed by
manufacturing, with seven.
Nationally, there were 31 exits during the first quarter of 2011
compared to 36 in the last quarter of 2010. Of these, 13 were by
trade sale, 11 by secondary buy-out and seven through creditor's
exit.
"There is still some caution in the market but despite the low
figures for the first quarter, most commentators believe that the
number of deals will pick up as we go through the year and it is
thought that 2011 will overall be more active than 2010 which in
itself showed an increase on 2009," said Mr Harper.