Report: Private Equity Activity In U.K. Remains Robust

Aug 28 2007 | 10:18am ET

UK mid-market private equity activity has been robust this year, according to Lloyds TSB Development Capital. The firm’s recently released Regional Mid-Market Private Equity Barometer shows a 35% increase in activity levels in the mid-market private equity segment during the first half of 2007.

According to the report, there were 132 mid-market transactions completed during the first half of 2007, a 35% increase on the 98 transactions completed in H1 2006. Meanwhile, the total value of mid-market transactions completed in H1 2007 remained at similar levels to last year at £3.66 billion (H1 2006: £3.69 billion)

The £5 million to £50 million range was the most active part of the market, with a 44% increase in transaction numbers to 105, and a 32% increase in transaction values to £1.7 billion. London saw the biggest increase in transaction volumes – up 72% to 55 (H1 2006: 32), with a 38% increase in total transaction value at £1.4 billion (H1 2006 £1.04 billion). The Midlands and the South saw a 30% increase in transaction volumes, while transaction volumes in the North of England were at similar levels to H1 2006.

The most active sector of the market in H1 2007 remains support services (both by total transaction value and volume), with 27 completed deals worth £500 million in total. The sector with the highest average transaction value in the first half of 2007 was travel and leisure at an average of £82 million.

Commenting on the findings of the report, Grant Berry, UK regional managing director of LDC said: “The mid-market segment of the UK private equity sector remained very active during the first half of 2007, despite the barrage of negative publicity surrounding the wider private equity sector during the period. This shows a continuing support for management teams looking for backing to develop their business and businesses who have confidence in private equity to help them move forward. The volume of deals has also not been impacted by the tightening in the debt markets.”


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