Private equity-backed buy-outs top £1bn

THE West Midlands private equity-backed buy-out market rose above the £1bn threshold for the first time in three years in 2011.

Figures published by the Centre for Management Buy-Out Research (CMBOR) reveal a grand total of £1.1bn in PE-back buy-outs compared to £801.3m in 2010.

The last time the market exceeded the £1bn threshold was in 2007 (£1.939bn).
The number of deals in the region also rose significantly – to 20 in 2011 compared with 11 in 2010 – again the highest for four years.

The West Midlands figures were boosted by the sale of Phones4u in April 2011, valued at £677m (the fourth largest deal across the UK) and the sale of Pattonair in July, valued at £146m.

Phil Griesbach, director at research sponsor Equistone Partners Europe in Birmingham, said the West Midlands had performed particularly well in a difficult environment.

“Despite being a very unstable year for the economy, the private equity buy-out market in the UK remained fairly resilient in 2011. Positively, at a high level, the West Midlands appears to have done well, although you need to look behind the statistics as often one or two large deals can skew the picture,” he said.

Nick Gillott, a director at fellow sponsor Ernst & Young in Birmingham, said: “It’s great to see the West Midlands performing relatively strongly when compared to the national picture in what continues to be a very volatile environment.

“The pipeline of deals as we enter 2012 is encouraging, and with capital available to drive continued activity in the secondary buy-out market, we are optimistic that 2012 will see another robust performance in the context of a slower broader market recovery.”