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Deloitte

SOUTH WEST DEALS MARKET DROPS BY TWO-THIRDS IN 2007, ACCORDING TO DELOITTE

New figures show regional deal flow held steady last year – but total value fell from £1.8bn to £600m

The number of deals completed in the South West in 2007 held up compared with the previous year – but their total value fell by around two-thirds, according to new research.

The latest figures from CMBOR, the leading provider of analysis on the UK buyout market, founded by Barclays Private Equity and Deloitte, shows the number of deals completed in

2006 in the South West - 40 - was matched last year. But the study also shows that total deal value feel sharply, from £1.8 billion in 2006 to £600 million in 2007. 

Nationally, the CMBOR figures show that despite a quiet end to the year, 2007 still produced record total deal value of £42.2 billion, compared to £26.5 billion in 2006.

Major deals to complete on which Deloitte advised in the South West last year included:

  • the £100 million-plus sale of Cheltenham-based Pegasus Retirement Homes to the equity ventures arm of RBS
  • the £60 million sale by Devon County Council of Exeter Airport to a consortium including Balfour Beatty and London City Airport
  • the £52 million sale of Bristol-based Cowlin Construction to Balfour Beatty  

Martyn Gregory, Corporate Finance Partner at Deloitte in Bristol, commented: “The credit crunch has clearly had a dramatic impact on bigger private equity deals in Q4, which has impacted the year‘s overall deal value and volume.

“However, while mid-market deals (£10 million-£1 billion) were also down this quarter, overall in 2007 the value at £20 billion was consistent with the previous three years.

“Analysis of deals by sector over the year reflects the downward trend in UK consumer confidence – leisure sector deals in 2007 dropped 80 per cent to just £1.26 billion after £5.56 billion in 2006. Business and support services showed the greatest increase trebling from £2.46 billion last year to £7 billion this year - demonstrating a private equity preference for business exposure rather than consumer exposure.

“It is interesting to note that our current deal pipeline is as strong as it was this time last year, although many of the transactions we are executing are corporate to corporate in nature.” 

ENDS             4th February 2008

For further information please contact Neil Fraser, Sturgess Van Damme, on 01275 349011 or email neil@sturgessvandamme.co.uk