UK Private Equity Deals Fall To Lowest Level in 13 Years

LONDON (Reuters) – The value of UK private equity takeovers fell to the lowest level in 13 years between October and December due to a lack of debt funding and the rapidly cooling economy, a leading research group said on Wednesday.

The value of buy-out deals reached just 994 million pounds ($1.48 billion) in the fourth quarter compared with 5.7 billion pounds for the same period of 2007 and 5.6 billion pounds in the third quarter of 2008, said the Centre for Management Buy-out Research (CMBOR).

CMBOR, founded by the Nottingham University Business School and sponsored by Barclays Private Equity (BARC.L), said total buy-out value for 2008 fell to 19.1 billion pounds from a record tally of 45.9 billion in 2007.

“Last year started off in good shape with the strongest quarter one on record. Subsequent quarters however all witnessed marked falls in buy-out activity as the market squeeze has tightened,” Christiian Marriott, director at Barclays Private Equity, said in a statement.

He added the analysis showed that deals in the business and support services sector increased to 33.4 percent of total value for the year from 16 percent in 2007. Meanwhile, deals in the embattled retail sector fell to just 3.2 percent of total value from 31.2 percent the previous year.

The data showed that deals worth more than 500 million pounds fell most deeply in 2008, down 68 percent to 8.7 billion pounds. Deals in the 100-million to 500-million pound range halved, while deals worth between 10 million and 100 million pounds fell 34 percent.

(Reporting by Simon Meads; Editing by Sharon Lindores)