North West is busiest buy-out region

THE North West accounted for 21% of all UK private equity buyouts during the first six months of 2012, making it the busiest region outside of London, according new research.

Figures from the Centre for Management Buyout Research (CMBOR) stated that deals with a value of £1.9bn were done during the region in the first half – bettered only by the £2.9bn of deals done in the capital.

The North West figure was heavily skewed by the £1.55bn deal done for Deeside-based frozen food retailer Iceland led by founder Malcolm Walker, which received backing from South African private equity firm Brait as well as from DFS founder Lord Kirkham and Dubai-based retail group Landmark.

The £1.9bn figure for the North West is a 103% increase on the £938m achieved during the first six months of 2011.

However, momentum slowed during the period with just five of the 12 deals completing in the second quarter. These had a combined value of £270m – half of which came from Equistone Partners’ investment in Fircroft Engineering Services.

THE CMBOR research was sponsored by Equistone Partners and Ernst & Young.

Equistone’s northern office head, Steve O’Hare, said: “The North West private equity market was robust during the first half of the year, although the figures were swelled by the large Iceland deal.

“Whilst economic conditions remain weak, good quality management teams and business can still see growth and attract funding. If economic uncertainties, particularly the Eurozone crisis, become more stable in the second half of the year, then we would expect to see an uplift in the deals completed.”

Mark Clephan, M&A director at Ernst & Young, said: “It is encouraging to see a rise in buy-out values in the North West, but we should remain cautiously optimistic.

“Although activity is showing signs of improvement on last year, it is all relative, and there is still a lack of quality assets coming to market.”