Private equity buy-outs for 2010 overtake total 2009 value

Private equity-sponsored UK buyouts have shown a marked recovery in 2010, after figures revealed that the value of deals so far this year has already overtaken the 2009 full year transaction value.

The 2010 total has already reached £7.9 billion, compared with last year's figure of £4.7 billion. The number comes from the values of 87 deals so far, which is a weighty majority of the 120 counted for the whole of 2009.

Christiian Marriott, director at Barclays Private Equity, said that even though there was a small slow down on the second quarter figures for this year, the number would still show an exceptional recovery from the industry lows of 2009.

"With volatility in global equities, a looming general election and uncertainty around future capital gains tax, it is not surprising that the momentum in UK buy-outs has flagged," he said.

The Centre for Management Buyout Research (CMBOR) has found that private equity-backed buy-outs in 2010 averaged a value that was more than double that of 2009, from £39.5 million to £91.2 million. It is the second-highest buyout size ever recorded, after the 2007 value of £133.7 million.

The recovery is thought to have been led by secondary buyouts, in which one fund manager sells on a portfolio company to a competitor manager. Deals like this have accounted for 60 per cent of the market by value, with a total worth of £4.8 billion.

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