Member Article

Yorkshire buyouts at their highest since 2008

According to the latest data from the Centre for Management Buyout Research (CMBOR), the second quarter of 2014 has been the busiest for Yorkshire in terms of deal volume since the start of 2008.

The research, sponsored by Equistone Partners Europe and EY, shows that eight Yorkshire deals were completed worth £265 million – the largest volume for 25 consecutive quarters.

London still remains the strongest performing region seeing eight deals (worth £1.53bn) in the second quarter of 2014.Elsewhere in the UK, the North West also completed eightdeals (worth £257.8m), followed by the South East with seven deals (worth £89.8m).

The buoyant second quarter pushed Yorkshire’s half-year figures to 12 deals worth £883 million, which is a positive sign for the region’s deal market.

During the same period last year, there were nine deals worth a total of £1.1 billion. This was swelled by two big-ticket transactions, including the £400 million sale of Harrogate-based Principal Hayley to Starwood Capital, and the £300 million buyout of Leeds-based ghd to Lion Capital.

Some of the most notable transactions in the region in the first six months of 2014 include the acquisition of Callcredit Information Group by Vitruvian Partners for £400 million and Morgan Stanley’s acquisition of Zenith Vehicle Contracts for £200 million.

Steve O’Hare, partner at Equistone Partners Europe, said: “It is impressive to see that this was the most active quarter for the Yorkshire market since the start of 2008.

“With confidence returning and deal volumes increasing across the region, we are pleased that more management teams are turning to private equity funding to support their growth ambitions.

“It is also encouraging that funding from debt markets remains accessible in a range of forms to businesses in the lower end of the middle-market, as well as for larger transactions. This isevident in the number of refinancings that have successfully gone ahead in the first six months.”

Mark Clephan, corporate finance director at EY in Yorkshire, commented: “A consistent flow of high quality businesses coming to market remains vital if the region is to maintain its position and match last year, which saw the Yorkshire buyout market’s best performance since 2010.

“Our own pipeline, alongside good debt market conditions and the strong pool of Yorkshire-based corporates entering new phases of investment, suggests that the region’s buyout market can go on and have a good year.

“Three of the top four largest exits in the UK in Q2 – B&M Retail, Card Factory and Polypipe – were Northern businesses that listed on the public markets.

“While this highlights the strength of opportunity for private equity investors backing companies in the North, it also illustrates that the attractive IPO market is likely to continue to diminish the pool of Northern secondary buyout opportunities, which have traditionally helped to replenish the regional deals markets.”

This was posted in Bdaily's Members' News section by Clare Burnett .