‘Tax breaks and private equity cash will drive deals’

DEAL values and volumes should improve this year on the back of an economy that is more stable than at any time since the start of the 2009 recession.

That’s according to Steve O’Hare, director at Barclays Private Equity (BPE) in the North.

He believes a combination of tax breaks for business vendors and the funds held by private equity firms will drive deal activity during the year.

“We will not see a return to highly leveraged, pre-recession transactions, but this year should be better than the last in terms of overall deal volume and value,” said Mr O’Hare.

“The bottom line is that now is as good a time as any to sell a business, as valuations are unlikely to change dramatically in the foreseeable future.”

Activity will also be spurred by private equity disposals as they seek to return cash to investors.

He added: “While we are yet to fully understand how public sector cuts will impact private business in 2011 and how the inevitable spike in unemployment will affect consumer spending, the economy is the most stable it has been since the recession began.”