Private equity industry witnesses ‘mega deal’ revival
ACCOUNTANCY firm KPMG has said that the UK’s private equity industry had enjoyed an “incredibly strong” third quarter of the year after completing 30 deals worth a combined £9.3bn.
The firm credited the rise of the “mega deal” for much of the growth, stating that although the value of deals was much higher than the corresponding period last year (£3.6bn), this was generated from a lower number of deals – 30, compared with 36 last year.
John Hughes, KPMG;’s Manchester-based head of its private equity group in the regions, said: “While corporate UK M&A dealmakers were away on holiday, private equity fund managers broke ranks and notched up three £1bn deals in July and August. Mid-market management buy-outs had been the strong recovery story of 2010, but we are now seeing bolder plays in a variety of industry sectors.”
Some of the larger deals with private equity involvement have been the sales of engineering firm Tomkins for almost £3bn, RBS Worldpay for around £2bn and vending machine firm Autobar for £1bn. In the North West, the biggest deal to complete was United Utilities’ sale of its Meter Fit business to joint venture partner Marlin Acquisitions for £119m.
“The fuel to the fire is renewed private equity confidence in the high yield bond and debt markets but the availability of debt for ‘big ticket’ deals is not a given, particularly while markets remain fickle,” said Hughes.
“Notwithstanding any shocks to the system, we expect to see even more activity in the run up to Christmas and the New Year.”
