Yorkshire buyout market shows signs of recovery
THE overall value of buyouts in Yorkshire and Humber increased by 85% to £287.1m in this year’s first quarter compared with £155m in the fourth quarter of 2009, according to today’s figures from the Centre for Management Buyout Research (CMBOR), sponsored by Barclays Private Equity.
The total deal value for the whole of 2009 was £305.4m.
Quarter one of 2010 saw the highest quarterly deal value for the region since 2008’s first quarter, propped up by the buyouts of commercial laundry equipment supplier John Laithwaite Associates for around £150m and car parts distributor Andrew Page for £100m.
These two transactions accounted for an estimated 87% of the total value of deals in Yorkshire and Humber in the first quarter, contributing to an average deal value of £23.9m – the highest average buyout value in the region since quarter one of 2008.
There were 12 deals in the region in quarter one, up from 11 in the previous quarter.
Of the 12 buyouts in Yorkshire and Humber, nine were under £10m with a combined value of £12m.
There was only one deal in the lower mid-market – the estimated £25m buyout of fast-food restaurant chain Harry Ramsden’s by Boparan Ventures.
There were five buyouts of family or private companies, making this the largest source of deals in quarter one in Yorkshire and Humber.
Four transactions came from local parent companies compared with five for the whole of 2009. Only three businesses were bought out of receivership in quarter one, which compares favourably to 14 for the whole of 2009.
Steve O’Hare, director at Barclays Private Equity in the North, said: “After a slow 2009, there is evidence of the beginnings of a recovery in the Yorkshire and Humber buyout market, thanks in part to stabilising company valuations and the banks’ appetite to lend slowly returning. This is reflected in the total value of deals and the average value in the region – propped up by the buyouts of JLA and Andrew Page in quarter one – which have returned to levels seen in quarter two 2008.
“Despite this, there remains a lack of buyouts in the £10m – £100m bracket, which is reflected in the fact that the two large deals completed in Yorkshire and Humber in quarter one made up 87% of the overall deal value in the region. Similarly, the number of transactions completed in quarter one failed to improve significantly against results for quarterly figures for 2009.”
He added: “While results for this year’s first quarter are encouraging on the whole, this is only a step in the gradual recovery of the regional buyout market.”
