Member Article

North West buyout market grows to £1.82 billion

The total value of private equity-backed buyouts in the North West has grown by 9% in 2014, while a return for IPOs in the first six months of the year boosted the combined value of exits in the region to a record high.

According to the latest figures from the Centre for Management Buyout Research (CMBOR), which is sponsored by EY and Equistone Partners Europe, the total value of private equity-backed deals in the North West reached £1.82 billion in 2014, up from £1.67 billion in 2013.

The regional market’s performance this year was buoyed by 7 buyouts with a combined value of £908 million in Q4 2014, representing the highest quarterly total value since Q1 2013.

However, the number of private equity deals in the North West in 2014 fell by 15% to 29, down from 34 a year earlier.

The North West was the third best performing UK region by volume and value, behind London and the South East.

Meanwhile, the resurgent IPO market in the first half of 2014 supported the largest annual total exit value ever recorded in the North West at £5.54 billion, which was more than quadruple the £1.07 billion recorded in 2013.

This performance was underpinned by the IPOs of B&M Bargains (June) and Pets At Home (March), which provided exits for Clayton Dubilier & Rice, and Kohlberg, Kravis & Roberts respectively.

Corporate finance director at EY in the North West, Mark Clephan, said: “The North West buyout market had a robust 2014 thanks to an end-of-year boost from mid-market and lower mid-market deal activity, as well as favourable debt market conditions and well-capitalised private equity firms investing during the year.

“However, 2014 will be remembered for its exits, with the private equity-led IPO flurry we saw at the start of the year driving up total exit value.

“While we’re likely to see fewer IPO exits in 2015, this route remains open for exceptional private equity-backed businesses that are clearly differentiated and have proven profitability, while corporate acquirers are also becoming increasingly active.

“Sponsors operating in the region have dry powder ready for deployment. There is currently a strong pool of regional corporates entering new phases of investment and the challenge for private equity in 2015 will be backing the right businesses at fair valuations.”

This was posted in Bdaily's Members' News section by Sophia Taha .