The UK private equity market recorded its best year ever according to buyouts data provider
The value figure is slightly up on 2005’s £24bn, which was invested over 680 deals, and there has been a £2bn increase in mid-market deals, accompanied by a £2bn drop in deals over £500m.
Mark Pacitti, corporate finance partner at
It all looked so different a few months ago. In October CMBOR was reporting that just £16.9bn had been invested, which compared unfavourably to the same period in 2005 of £19.3bn. Pacitti, Corporate Finance Partner at Deloitte, commented: “Last year’s Christmas hangover lasted well into 2006, with first half deal levels looking less than healthy at around £10bn. Coming into the summer, we saw a new energy in the market as figures more than made up for the sluggish start to the year bumping up 50% to £15bn for the second half. Notably, in the highly competitive mid market range of deals between £100m and £500m, we have seen total deal value increase by 30% to £10bn compared with £7.5bn in 2005. As a result, average deal size (over £10m) has gone up by 9% this year hitting £134m.”
The hardening of public shareholders to private equity advances has had an obvious impact on deal flow at the top of the tree. Combined with a similar fall in secondary deals, this has seen a return to primary deals. Value share of PTP and secondary MBOs has fallen from 66.8% to 52.1%, whilst combined value of family and divestment deals has increased from 30.3% to 46.8%.
Tom Lamb, co-head of