P2Ps drive UK buyout market

Almost half of the value of all UK buyout deals in the first half of 2005 came from public-to-private transactions. The value of these transactions hit £4.9bn, the highest level since 2000, according to data from the Centre for Management Buy-Out Research (CMBOR), sponsored by Barclays Private Equity and Deloitte

Public-to-private buyouts and buy-ins account for 45% of the value of all deals in the first half of 2005 compared to 17% for the whole of last year. The average deal size is almost £500m compared to between £100m and – £200m in past years.

While public-to-private deals have surged, the value of other deals, including secondary buyouts, has also increased, rising by 18% to £6.4bn compared to £5.4bn during the same period last year.

The half year figures also show the retail/consumer sector has fallen out of fashion with completions at £255m in the first half against £2.5bn in the entire previous year. In contrast, the healthcare sector is going from strength to strength benefiting from macro-drivers such as the ageing population and concerns over the NHS. To date, there have been 15 healthcare buyouts worth £3.4bn in comparison to just £1.5bn during the whole of 2004. Half of all deal value in the first six months is from the healthcare and leisure sectors.

Tom Lamb, co-head of Barclays Private Equity, says: “Total deal value in the first six months of 2005 has already reached £11.3bn compared to £8.2bn over the same period last year. Of this, six of the 10 top deals were public-to-private. This means we’re on track for a record year for public-to-privates which looks likely to exceed the previous record of £9.4bn in 2000.”