Member Article

Yorkshire and North East mid-market deals to recover

Yorkshire and the North East will see a nascent recovery in mid-market deals despite a drop in private equity-backed transactions in the regions, according to investment specialists LDC.

The latest figures from the LDC and trade magazine UK Mid-Market Barometer report showed a 50% drop in the number of deals between £5m and £150m last year, while the value of transactions decreased to £232m from £569m year-on-year.

Across the whole of the UK, however, mid-market buyouts were up in both value and volume, with a rise from 190 in 2011 to 203 last year, with a total value of £8.8bn up from £5.8bn.

Results in Yorkshire and the North East suggest that tough trading conditions are still having an impact on the private equity market in those regions.

John Garner, head of LDC in the two regions commented: “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.”

This was posted in Bdaily's Members' News section by Miranda Dobson .