While Europe saw a subdued start to 2012 buy-out activity, the UK has contributed 48 per cent of total deal value.
The UK market has reclaimed its position as the most active country in Europe for buy-outs following its contribution of nearly half of all European deals in value and volume.
The results for the first quarter of 2012, from the Centre for Management Buyout Research (CMBOR), shows that in the UK 62 deals worth £5.2 billion accounted for 48 per cent of the overall value totals for Europe.
Compared to the first quarter of 2011, when the UK dropped below France in terms of value of deals, the figure is 93 per cent higher. The UK’s current total represents the largest share of the buy-out market held by a single country in any given quarter since the third quarter of 2002.
In the UK, nine insolvency transactions were completed in the UK in the first quarter of 2012, including that of UK retailer Comet. Only 16 insolvency buy-outs were closed in 2011 as a whole.
Private equity firm Equistone Partners Europe and accountancy firm Ernst & Young sponsored the report.
On a European basis, buy-outs decreased from €14 billion from 139 deals to €13 billion (£10.8 million) from the same amount.
The number of public to private (P2P) buy-outs rose to eight for the first three months of the year, compared to 13 for the whole of 2011 and 21 in 2010. Small deals drove P2P transactions, with averages of €183 million.
Christian Marriott, director at Equistone Partners Europe, comments, ‘The European buy-out market has had a cautious start to the year, reflecting ongoing uncertainty in the Eurozone. As a result, some recent investment and sale plans have been delayed or abandoned, increasing the volume of completions this quarter.’
Sachin Date, EMEIA private equity leader at Ernst & Young, says that despite volatility in the Eurozone, the financing markets are beginning to relax.
‘Debt has traditionally been fundamental to the private equity business model and deals done in Q1 on average included substantially more leverage than over the past couple of years,’ Date adds.
‘This said, private equity houses are increasingly looking to alternative sources of finance. The bond financing market is open and packages are being used more frequently than for some time.’