Ernst & Young: UK buy-out market value increases 23% in 2012

By Rob Starr, Content Manager, Big4.com

The UK’s Private Equity (PE) buyout market proved to be the most bankable PE market in 2012, boosted by Sterling’s attractiveness as a relative safe haven for investors who are keen to continue deal making in Europe without exposing themselves to Eurozone volatility.

The value of UK buyouts has risen 23% so far this year to £15.7bn from £12.7bn in 2011, and the number of deals recorded rose slightly to 189 compared to 187 over the same period. Average deal size in the UK has also increased to £84m, up from £68m, according to the latest data published by the Centre for Management Buyout Research (CMBOR) and sponsored by Ernst & Young and Equistone Partners Europe.

Buyout numbers as a percentage of UK M&A have risen to 45% in the first nine months of this year, compared to 33% in 2011.  As a proportion of M&A, buyouts values have risen to 82% for the first nine months compared to 61% for the whole of 2011.

Deal activity and values in the mid market held up well in 2012. In the deal range £50m – £250m there were 39 deals equating to £4.1bn in value, versus 36 deals and £3.8bn respectively in 2011. Total number of deals so far this year in the £250m to £1bn range totalled 10 with a combined value of £6.0bn, compared to 11 and £5.8bn in 2011.