The rate of decline in the sales of UK mid-market companies has slowed in Q1 of 2009.
The latest findings from corporate finance advisers BDO Stoy Hayward’s Private Company Price Index (PCPI) indicate that although Q1 marked the fifth consecutive quarter of decline, the 493 deals recorded last quarter were in line with the 494 deals recorded in Q4 2008.
In further positive news for private equity, transactions involving private equity buyers fell by only 1% from Q4 2008 to Q1 2009. The most recent price index for the private equity industry has given hope that despite volumes and prices continuing to fall, lending institutions are getting the message from the M&A community that now is the time to re-open for business.
But despite mid-market players attempting to accentuate the positive, the figure that shows a marginal decline is also marking the industry at its lowest level for 10 years. The market is down 57% compared to the1159 deals in the same period of 2008. Company prices have also contracted by 12%. Of the deals that have been completed in Q1, the majority (402) were trade sales to non-private equity firms which were down 11%.
Corporate finance partner at BDO Stoy Hayward, Christopher Clark, said: “Whilst the reduced volumes of deals and prices remains a frustration, there are reasons to be cautiously optimistic about the future.”