The Centre for Management Buy-Out Research has released its second exits report, which has found that some £37bn worth of value remains locked in buyout situations. The total value of exits did rise in 2003, although largely thanks to increased exit activity in the second half of the year.
The report also found that in 2001 the average lifetime of a buyout was just over five years, compared with 3.5 years at the start of the 1990s. Average time to exit by 2003 had crept up to six years.
Tom Lamb, managing director of Barclays Private Equity, said: “The gap between total deal value and total exit value has narrowed since 2000 but this reflects the downturn in investment activity rather than an increase in exits. In fact, the total value of exits has remained surprisingly stable since 2000, although this masks a surge in secondary buyouts compensating for the dramatic decline in trade sales.”
The report also found that buyouts worth more than £100m have the best track record of making exits. This is illustrated by the fact that over 60% of the £100m plus deals in 1997 have been exited whereas only 25% have been realised in the sub £25m deal value category. While IPO exits increased slightly in 2003, unfortunately write offs continued to increase as an exit category. Secondary buyouts as an exit method reached £4.4bn in value, four times the value of such transactions in 2002.
Exits of UK MBOs/Buy-insExit Type Buy-out Buy-in Total
1992
Trade Sale 45 12 57
Flotation 7 4 11
MBO/MBI 13 0 13
Receivership 93 21 114
Total 158 37 195
1993
Trade Sale 63 13 76
Flotation 31 6 37
MBO/MBI 19 3 22
Receivership 58 24 82
Total 171 46 217
1994
Trade Sale 81 11 92
Flotation 43 5 48
MBO/MBI 19 1 20
Receivership 49 7 56
Total 192 24 216
1995
Trade Sale 87 18 105
Flotation 19 10 29
MBO/MBI 20 11 31
Receivership 46 30 76
Total 172 69 241
1996
Trade Sale 105 23 128
Flotation 35 13 48
MBO/MBI 36 5 41
Receivership 44 17 61
Total 220 58 278
1997
Trade Sale 99 33 132
Flotation 21 11 32
MBO/MBI 31 12 43
Receivership 35 22 57
Total 186 78 264
1998
Trade Sale 94 40 134
Flotation 13 3 16
MBO/MBI 35 11 46
Receivership 51 34 85
Total 193 88 281
1999
Trade Sale 80 36 116
Flotation 6 2 8
MBO/MBI 30 11 41
Receivership 59 26 85
Total 175 75 250
2000
Trade Sale 91 45 136
Flotation 10 6 16
MBO/MBI 17 11 28
Receivership 57 46 103
Total 175 108 283
2001
Trade Sale 65 30 95
Flotation 4 3 7
MBO/MBI 22 13 35
Receivership 72 41 113
Total 163 87 250
2002
Trade Sale 42 37 79
Flotation 5 6 11
MBO/MBI 46 19 65
Receivership 81 40 121
Total 174 102 276
2003
Trade Sale 18 10 28
Flotation 2 0 2
MBO/MBI 18 10 28
Receivership 33 19 52
Total 71 39 110
* Year 2003 figures are for first 6 months only
Source: CMBOR/Barclays Private Equity/Deloitte & Touche
Exit numbers and exit values 1985 to 2003
Number of Exits Total Exit Value (£m)
1985 43 387.006
1986 76 951.944
1987 86 1286.412
1988 118 2146.967
1989 158 2422.825
1990 172 2512.101
1991 177 461.376
1992 195 2251.348
1993 217 3349.808
1994 216 3862.806
1995 241 4521.142
1996 278 7214.672
1997 264 5890.066
1998 281 4377.813
1999 250 6519.652
2000 283 9739.649
2001 250 8262.441
2002 276 10809.333
2003 110 3239.32
* Year 2003 figures are for first 6 months only
Source: CMBOR/Barclays Private Equity/Deloitte & Touche
Total deal value and total exit value, 1985 to 2003
Year of Deal Total Deal Value (£m) Total Value of Exits in Year (£m)
1985 1227.5 387.006
1986 1479.8 951.944
1987 3444.8 1286.412
1988 5016.9 2146.967
1989 7507.4 2422.825
1990 3094.7 2512.101
1991 2914.1 461.376
1992 3306.7 2251.348
1993 2776.7 3349.808
1994 3742 3862.806
1995 5620.5 4521.142
1996 7859.9 7214.672
1997 10666.4 5890.066
1998 14508.8 4377.813
1999 16681.6 6519.652
2000 23852.6 9739.649
2001 19489.4 8262.441
2002 15306.5 10809.333
2003 7194.7 3239.32
* Year 2003 figures are for first 6 months only
Source: CMBOR/Barclays Private Equity/Deloitte & Touche
Average time to exit for UK MBOs/Buy-ins by exit year and type
Exit Type 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Flotation 40 36.63636364 45.21621622 46.4375 52.03448276 48.91666667 62.03125 35.5625 27 38.125 63.71428571 42.81818182 94
MBO/MBI 44.9 81.07692308 69.13636364 76.2 76.22580645 98.17073171 97.02325581 69.10869565 58.19512195 78.5 70.08571429 78.58461538 82.17857143
Receivership 39.01612903 46.20175439 44.32926829 55.14285714 50.06578947 46.6557377 56.12280702 53.58823529 65.31764706 51.4368932 62.11504425 60.81818182 69.01923077
Trade Sale 51.21052632 51.64912281 50.69736842 55.31521739 59.64761905 60.9921875 56.46969697 51.60447761 58.84482759 53.47794118 68.32631579 50.44303797 61.46428571
* Year 2003 figures are for first 6 months only
Source: CMBOR/Barclays Private Equity/Deloitte & Touche
Percentage of UK MBOs/Buy-ins, which have made an exit by value range/vintage year
Deal Range 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
< £10m 37.83 29.35 32.57 33.12 32.92 29.07 23.57 23.17 15.49 8.98 7.13 2.94 0.81
£10m – £100m 77.08 84.75 77.08 72.62 63.64 61.34 50.34 44.87 27.44 16.33 6.67 0.85 0
Over £100m 100 100 100 75 66.67 60 62.5 42.31 38.24 20 8.33 0 0
* Year 2003 figures are for first 6 months only
Source: CMBOR/Barclays Private Equity/Deloitte & Touche
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