Pets deal boosts buyout figures
THE £955m sale of Cheshire retailer Pets at Home to KKR boosted the value of North West buyouts to £1.25bn in the first three months of this year, research has revealed.
The total was up from just £`16.7m in the previous quarter and £423m recorded during the whole of 2009, the data from the Centre for Management Buyout Research (CMBOR), revealed.
After a tough two years for the sector as a result of the credit crunch, the total for Quarter 1 2010 was actually the highest since the second quarter of 2005.
Montagu Private Equity’s £280m sale of Survitec was the other major transaction this year. This and the Pets deal accounted for 99% of total activity.
The figure could have been higher still had Matalan founder John Hargreaves not withdrawn his business from a sale process.
In total there were 11 deals in Q1 in the region, down 21% on 14 deals the previous quarter, and 31% in Q1 2009.
The manufacturing sector generated the highest number of deals in the North West, with seven completed transactions.
John Walker, director at Barclays Private Equity in the North, which sponsors the Centre for Management Buyout Research said: “While the two high value deals seen in January were highly positive for the North West deals market following a dearth of transactions in 2009, these represent only a step in the gradual recovery of the regional buyout market.
“It is also clear that both regionally and nationally, secondary buyouts are gradually increasing, suggesting that private equity is returning to the market.
“Furthermore, instances of businesses being bought out of receivership are down in comparison with the previous quarter, indicating that economic conditions are improving.”
Despite the improvement Mr Walker said the drop -off in deal volumes during the quarters was possibly related to the general election with vendors and investors keen to await its impact on valuations and legislation.
