UK Buyout Market Slumps To 25-Year Low; Debt Elusive - Study
October 05 2009 - 7:31AM
Dow Jones News
The U.K. private equity market slumped to its lowest level for
25 years in the third quarter with just 31 completed deals,
underlining the difficulties buyout shops continue to face while
loan finance to fund acquisitions remains elusive, according to a
study released Monday.
The value of buyouts over the same period also dived, with just
GBP556 million exchanging hands, the lowest for 15 years and taking
the total value for the first nine months of the year to GBP3.6
billion, dramatically lower than the yearly figures of GBP18.2
billion and GBP43.4 billion in 2008 and 2007, said the Centre for
Management Buyout Research, or CMBOR.
Even midmarket deals - those below GBP500 million - have become
scarce and private equity firms across the board are having to
stump up more cash when they buy companies, said CMBOR.
As a result private equity buyouts as a percentage of overall
U.K. M&A activity has fallen 21% by value since last year,
representing just 26% by value of the total market and a long way
from 2007 when 62% of all takeover activity comprised private
equity buyouts.
"The private equity market isn't yet showing any significant
signs of recovery," said Christiian Marriott, director at Barclays
Private Equity, sponsor of the research.
"The only upswing is in the number of businesses in receivership
acquired by private equity firms, which has risen to 17, a rise of
55% on the year and its highest level since [the last boom and bust
in] 2001," he added.
-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241;
marietta.cauchi@dowjones.com