Two ‘mega deals’ drive Northern buyout market past £4bn

Private equity in the North has reawakened since the EU referendum last summer, new data has revealed, with the value of buyouts hitting £4.436bn during H1 2017.

The latest findings from the Centre for Management Buyout Research (CMBOR), sponsored by Equistone Partners Europe and Investec Specialist Bank, show that the North of England’s overall buyout value was boosted by some of biggest transactions in UK so far this year.

Two of the transactions were classed as ‘mega deals’ – those with a value of £1bn or more.

The deals were private equity firm Epiris’ sale of North East-headquartered holiday park operator Parkdean Resorts to Onex Corporation for £1.35bn, and the sale of Manchester-based smart metering financing firm Calvin Capital to KKR, completed for £1bn.

The North East, North West and Yorkshire & Humberside regions combined accounted for over one-third of the UK’s deals.

Other highlights during the first six months of 2017 included the £180m sale of Karro Food Group to CapVest, and the sale of Willerby Holiday Homes to Equistone.

The figures show that the value of Northern private equity buyouts bounced back over the last 12 months, growing from £245m across 19 deals during H2 2016 to £4.436bn across 23 deals in H1 2017.

Equistone Partners Europe’s partner for the North of England, Steve O’Hare, said: “Looking at the latest statistics, it is clear that the Northern private equity market has recovered following the Brexit vote last summer.

“Even excluding the two mega deals, it is encouraging to see such an impressive rise in value.”

He continued: “This demonstrates the quality of management teams based in the North attracting capital to support their growth.

“The corporate finance community also continues to thrive across the regions, supporting entrepreneurs and management teams to find the right partners for their business. Despite economic and political uncertainty, the best businesses continue to innovate and invest to gain market share.”

Investec Growth & Acquisition Finance’s Shaun Mullin commented: “We are encouraged by sign that the UK, long the driver of European private equity dealflow, appears to be recovering from the Brexit outcome.”

He added: “A healthy mix of mid-market and mega-deals reminds us of private equity’s ability to invest across cycles, while the volume of smaller deals reaffirms the robustness of the UK’s SME sector as well as the appetite of many business owners in this area to bring on board financial backing to support their next stage of growth.”

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