The value of management buy-outs completed in the first six
months of this year increased by more than a half over the same period for the
year before.
The total value of the buy-out market was £13.5 billion, 56
per cent higher than the corresponding period for 2000, whereas UK merger and
acquisition (M&A) activity has reportedly fallen by 71 per cent.
The research, co-sponsored by Barclays Private Equity and
Deloitte & Touche Corporate Finance shows that, for the first time ever,
the buy-out market accounted for over half the value of UK M&A activity.
Tom Lamb, managing director UK of Barclays Private Equity
said: "With most potential trade buyers increasingly distracted by their
own trading difficulties the private equity houses are well placed to go
bargain hunting, particularly where there is a forced seller. Cash is
king."
Chris Ward, head of advisory services at Deloitte &
Touche Corporate Finance added: "The current lack of appetite for
acquisitions by most corporates means auction processes are becoming a
mechanism to achieve a reasonable price from a venture capitalist rather than
ramping up competitive tension between hungry buyers. The situation provides
plenty of opportunity for management teams, who in this environment are the key
to the value of the businesses, and their backers, who are unlikely to face
much competition in the bidding process."
