UK activity at all time high

The latest statistics from British research house CMBOR (the Centre for Management Buyout Research) show that even if the Alliance Boots deal is taken out, the first half total still reached £13.9bn, a 31% increase on last year.

Tom Lamb, co-head of Barclays Private Equity, said: “The Alliance Boots deal is a landmark event, as it is the first buy-out of a FTSE100 company. Interestingly, although it is the largest European buy-out ever and is 50% bigger than the next largest European deal (TDC, the Danish telecom business, which was valued at €13bn in 2006), it is only the fifth largest buy-out of all time on a global basis.”

The half-yearly figures represents a dramatic turnaround for the UK following a very slow opening quarter. Just £3.4bn worth of deals were completed in Q1, the lowest quarter for three years.

Mark Pacitti, Corporate Finance Partner at Deloitte, said: “After a sluggish start to the year private equity completions have bounced back in Q2 and we may well achieve a record £40bn by the end of 2007. Notwithstanding continuing concerns over consumer confidence on the high street, we have also seen a number of large scale secondary retail buy-outs this year including Fat Face, Threshers and Jimmy Choo.”

The retail sector has been the main recipient of private equity money so far in 2007 – £12.4bn has been invested, almost quadruple the £3.3bn of last year. However, this money has been concentrated into a number of high-profile deals as just 21 were completed, around a third of the total number for last year. Second on the list in terms of amount invested is the property and construction sector which saw £2.2bn invested in 15 deals.

Total public to private buy-outs in the first six months of 2007 have reached record levels of £14bn compared to nearly £6bn last year, accounting for two thirds of the total market value.

The level of fundraising has continued to be very high and is already at nearly £11bn, over half the record total of £20.2bn set in 2006.