Slow start to buyout activity in the Midlands

THE West Midlands has seen a slow start to the year in buyout activity terms with only two deals worth £16m in the first quarter of 2014.

The two buyouts in the West Midlands were the £14m sale of Telford-based Entanet International to Mobeus Private Equity Partners and the £2m sale of Coventry-based Grenade UK to Grovepoint Capital.

But research published by the Centre for Management Buyout Research (CMBOR) reveals this compares to a period of no activity in the same quarter of last year (Q1 2013).  

The research, sponsored by EY and Equistone Partners Europe, shows the UK as the clear leader in the European private equity (PE) buyout market, accounting for 40% of all buyout value in Q1 2014.

With £4.2bn from 47 deals this quarter, the UK has seen its market-share in Europe in terms of value increase by 5% from Q4 2013 and 8% compared with the same period last year.

John Houlden, transaction support partner for EY in the Midlands said: “The West Midlands has seen a slow start to the year with just two deals completed out of the 47 overall in the UK in the first quarter of 2014.

“With growing confidence in the economy, we expect to see a pick-up in activity throughout 2014 as private equity continues to support business growth in the West Midlands.”

Paul Harper, partner at the Birmingham office of Equistone Partners Europe, said: “We are witnessing more of the same – the first quarter of 2013 also saw just two deals in the West Midlands but overall, there is little doubt that the private equity market will improve in 2014.

“Not only are there some significant deals in the pipeline, but UK fund raising is back to peak levels – and that is likely to fuel future growth.”