Deal numbers nosedive

THE value of the private equity market in the North West has dropped to its lowest level since 2000, according to the latest research released today by the Centre for Management Buy-out Research (CMBOR).

The value of deals in the first quarter of 2009 reached just £52.5m – down from £631.5m in the same period last year.

CMBOR also reported that the total number of deals in the North West reached just 16 – the lowest since the first quarter of 2002.

John Walker, director of Barclays Private Equity in Manchester said: “Whilst there may be some early signs of green shoots in the local economy, this will take some time to feed through to deal activity.

“Although there are deals completing, these are at the lower end of the market and a world away from the 23 deals worth £1.9bn, we witnessed in quarter one 2007.”

There were 15 deals under £10m and just one worth £10-100m. Those deals in the lower bracket had a value of just £20m in the first quarter of the year while the only mid-market deal was worth £33m.

In terms of sectors, telecoms, media and technology (TMT) recorded five deals in the first three months of the year, up from an annual total of four in 2008. Deals in the TMT sector were worth £39m, up from just £6m last year.

All other sectors witnessed sharp falls in both number and value of deals. The largest fall was in business and support services which completed 14 deals worth £710m last year. So far in 2009 there have been just two deals in this sector worth £2m.

Mr Walker added: “It is highly unlikely the market in the North West will suddenly bounce back as the year goes on. Rather we expect it to stabilise at a new lower level. As soon as confidence and leverage return to the market then we should expect to see signs of a recovery but the timing of this is up for debate.”