Northern buyout activity predicted to recover in 2013

Buyout activity in the North East and Yorkshire is predicted to undergo a nascent recovery this year.

According to the UK Mid-Market barometer report, the total volume and value of mid-market private equity backed transactions in the North East and Yorkshire fell in 2012.

However, leading dealmakers are forecasting a recovery in activity over the coming year according to the report published by LDC.

The total value of transactions in the region went from £569m in 2011 to £232m in 2012, a decline of 59%.

The number of mid-market deals, valued between £5m and £150m went from 14 the seven in the same time period.

Nationally, mid market buyouts increased in 2012, with 203 recorded, up from 190 in 2011, deal values also increased, rising from £5.8bn to £8.8bn, across the same period.

The results indicate that the Yorkshire and North East private equity market continues to feel the effects of the challenging trading conditions.

However, John Garner, Head of LDC in Yorkshire and the North East, is confident that activity will pick up in 2013.

He said:“It is well known that conditions within the Yorkshire and North East market have been tough in recent years, with the reduced supply of investment opportunities apparent in the statistics.

“But, while it is still early in 2013, the pipeline has improved with a better volume and, more importantly, higher-calibre businesses are coming to the fore based on strengthened trading performance.

“However, deals won’t just fall out of the sky.

“The dealmaking community must engage with businesses earlier, even if they have not yet considered investment, to build long term relationships and ensure that there is a consistent pipeline of activity throughout the year and into the next.

“That said, the region can take confidence from the improved national picture for private equity activity, the availability of equity funding and the thawing of bank lending to support transactions, which should help support a stabilisation of private equity investment in 2013.”

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