Confidence boost as buy-outs hit £13bn

CONFIDENCE appears to be returning to the corporate buyout market with figures released yesterday showing the value of deals done so far this year is more double that for the whole of 2009.

In the first nine months of the year, the value of transactions rose to 13 billion compared to 5.6bn during 2009, according to a survey published by the Centre for Management Buy-out Research, Barclays Private Equity and Ernst & Young.

The increase was largely driven by a rise in the number of 500 million-plus deals with five completed so far this year compared to just two during the whole of 2009. Manufacturing, retail and business services were among the most active sectors. The survey also showed that private equity buy-outs accounted for a record 73 per cent of all UK merger and acquisition deals by value in the first half of 2010, the highest level ever recorded.

The overall value of private equity exits more than tripled in the first nine months of 2010, totalling 7.6bn compared to 2.3bn in 2009.

Steve O'Hare, director at Barclays Private Equity in the North, said: "Confidence is returning to the private equity buy-out market.

"With several large deals in the pipeline, we might see the year ending at near-2008 buy-out levels.

"It is encouraging to see the exit market opening up, not just from financial buyers but with an increased appetite from trade buyers."