Barclays Sees Signs of Life In NW Deals
Updated: 4th November 2008
Signs of Life: Deal activity in the North West slows but continues at a lower level
New data released today by the Centre for Management Buy-out Research (CMBOR) reveals that the private equity market in the North West has been impacted by international financial pressures, with activity levels standing at £259 million from just 12 deals in the third quarter of 2008. CMBOR, the UK’s leading provider of analysis on the UK buy-out market, sponsored by Barclays Private Equity, found that total deal value in the North West has reached £1.3 billion from 76 deals in the first nine months of the year compared to £2.6 billion from 83 deals for the whole of 2007.
“The market has clearly slowed in terms of deal flow. The first few months of this year saw a record in terms of the number of deals – especially in the sub-£100 million range – but that was a distortion brought about by changes to capital gains tax. What we are seeing now is the market settling at a much lower level,” said John Walker, Director of Barclays Private Equity in Manchester.
The first nine months of the year have witnessed a leap in the number of family buy-outs. There have been 36 family buy-outs in 2008, compared with 35 for the whole of 2007, making it the highest figure for four years. This is in contrast to a fall-off in the number of secondary buy-outs, undoubtedly affected by the reduction in banking liquidity, with just 11 so far this year compared to 17 in 2007.
“This year nearly half of all deals have been family buy-outs, which is the highest proportion ever. However, the popularity of this type of transaction reflects the fact than many deals are with smaller, owner-run businesses,” Walker continued.
Today’s data also reveals a robust performance across a number of sectors, namely manufacturing and healthcare. So far this year there have been 27 deals in the manufacturing sector worth £240 million, compared with an annual total of 30 deals worth £385 million in 2007. Healthcare has had the most successful year to date on record with nine deals completed worth £492 million. This is a huge leap from just three deals last year with a value of £39 million.
“Although we have seen a marked slowdown in deal activity, there are still signs of life. Some sectors, such as retail, continue to take a battering as they are inextricably linked to consumer confidence. However, the performance of the manufacturing and healthcare sectors demonstrates that there is still an appetite in the market for robust, solid businesses,” Walker concluded.
For more information:
To Submit Content For Inclusion, Contact:
