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Banks

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Currencies

China capital curbs reflect buyer’s remorse over market reforms

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Banks

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Categorized | Financial

UK buyout market drops in volume


Posted on June 30, 2013

The UK’s buyout market dropped in the volume and the value of deals in the first half of 2013, as private equity groups sought to use buoyant credit markets to refinance their existing investments instead.

There were 81 UK buyouts over the first six months of this year totalling £6bn, compared with 117 amounting to £8.6bn in the same period last year, according to data compiled by the Centre for Management Buyout Research at Imperial College.

    “The fundamentals for a healthy deal market are in place, there is an appetite for deals and the debt market is buoyant but, despite these positive signs, the market is still challenging and deals are taking longer to complete,” said Sachin Date, head of private equity for Europe, Middle East, India and Africa at Ernst & Young, a sponsor of the research.

    North American buyers have initiated 12 of the 17 buyouts worth more £100m or more, as evidenced by the acquisition of cinema chain Vue by Canadian pension fund Omers Private Equity.

    Private equity groups have, however, taken advantage of cheap debt to lead a record number of refinancings, according to CMBOR. There were 25 refinancings for £7.6bn, compared with 20 for a combined £3.4bn in the same period last year.

    Firms had also accelerated the pace of asset sales.