Buy-outs in the £100 million to £500 million range are being hit by the tough credit conditions, according to Centre for Management Buy-out Research (CMBOR).
Buy-outs in the £100 million to £500 million range are being hit by the tough credit conditions, according to Centre for Management Buy-out Research (CMBOR).
CMBOR’s latest figures reveal that deals dropped to £3 billion in the first six months of the year, which is less than half of the £7 billion generated in the same period last year.
Deloitte’s corporate finance partner Mark Pacitti said that while deals at the top end of the market were hit hard last year, the mid-market had proved more resilient. “However, the latest figures show that the private equity market is now feeling the credit crunch much more comprehensively and has hit a four-year low overall.
Pacitti challenged the general assumption that trade buyers would make the most of private equity houses struggling to access debt, and step into the breach. “Trade buyers are nowhere to be seen and of the 14 exits over £100 million this year, only two or three could be classified as trade-led.
“We are seeing a stalemate situation where private vendors are unwilling to budge on price and acquirers are holding out for a bargain. At the same time, we have seen public-to-private deals hold up, making up 48 per cent of the market value. The top four deals this year are all de-listings from the public market. With private vendors unwilling to discount, it is likely that we will see more private equity firms circling public companies.”
