The value of private equity completions in Ireland in 2007 fell to €440 million from €1.36 billion, down 67% on the previous year, according to the annual survey of the Centre for Management Buy-out Research (CMBOR), the pre-eminent provider of analysis on the Irish & UK markets founded by Barclays Private Equity and Deloitte.

The significant drop in buy-out / buy-in deal values during the year resulted in an average deal value of €33.8 million, down from €85.1 million in 2006. It was the lowest average deal value since 2000. In addition, there were no transactions in 2007 that exceeded the €250 million mark – compared to three such deals in 2006.

The number of transactions also decreased with a total of 13 buy-out / buy-ins in 2007 compared to 16 the year previously. There were 11 buy-outs and two buy-ins last year.

Commenting on the year’s highlights, David O’ Flanagan, Head of Deloitte Corporate Finance, said, “There was some evidence of a slowdown in buy-out activity in Ireland in the latter part of 2007. Deal sizes have also declined, potentially pointing to a tighter debt market for larger leveraged transactions. The trends that are apparent in the Irish marketplace mirror a similar situation in the more mature UK buy-out market, where the private equity market dropped by 80% in the final quarter of 2007.

“However, the Irish buy-out market is relatively underdeveloped, and we would still expect to see an increase in buy-out activity in Ireland over the medium term, particularly as credit markets stabilise. Given that buy-out deal values tend to be smaller in Ireland, the impact of the credit crunch is likely to be less severe than in other established buy-out markets such as the UK and US.”

Highlights of the 2007 report included:

• The Irish market has witnessed a decreased number of private equity completions in 2007, with a value of €440 million recorded in 2007. This figure is down €921 million compared to a full year figure of €1.36 billion for 2006.
• 2007 saw a total of 13 Buy-out/Buy-in transactions for the full year.  This compares with 16 transactions in 2006.
• While the number of deals completed has remained relatively stable, the average value of deals in 2007 has decreased to €33.8 million, compared with €85.1 million in 2006. In 2006, four deals had a transaction value in excess of €100 million, compared to two in 2007. There were no transactions in 2007 that hit the €250 million mark (2006:3).
• Activity throughout 2007 was distributed across a number of sectors – the TMT (Technology Media & Telecommunications), Retail, Food and Drink, Manufacturing and Business and Support Services sectors each saw two deals during the year. Buy-out activity in the TMT sector fell from 5 deals in 2006 to 2 in 2007.
• The €175 million transaction in the healthcare industry (Mater Private Healthcare) was the largest deal of 2007. The first public to private transaction in two years also took place in 2007 with the €104 million buy-out of Calyx Group. The most notable deal in the retail sector was the €70 million management buy-out of A- Wear from the Weston family.

Note to Editor:

Barclays Private Equity and Deloitte founded the Centre for Management Buy-out Research (CMBOR) at Nottingham University Business School in 1986. CMBOR is world-renowned as the long-standing leader in providing robust independent analysis of the buy-out and private equity market.