Figures released today by CMBOR, the pre-eminent provider of analysis on the European and UK buy-out markets founded by Barclays Private Equity and Deloitte, has revealed that the European buy-out market did not continue its stellar growth in 2007. The total market value was only held up due to a strong showing from the UK. The value of deals last year reached €171 billion, which, while technically a record year, was a barely significant increase in value over the €170 billion recorded in 2006.

The strong rise in the UK accounted for €66.9 billion of the total in Europe, while Continental value actually fell from €130.3 billion in 2006 to €104.6 billion last year.  While big public-to-private deals such as Alliance Boots and EMI boosted the UK, countries such as France, Denmark and the Netherlands all saw significant reductions in total value figures, featuring far fewer of the mega deals that drove the market forward in 2006.

It was not all bad news on the Continent, however.  Germany was one country that managed to show increased activity, up to €26.5 billion from €23.5 billion in 2006. Moreover, despite the second-half slow down, Continental Europe has produced seven of the top ten European deals, and still accounted for 60% of the total deal value, demonstrating its long-term importance as a buyout market.

The number of deals fell slightly in 2007 to 1,436 compared to 1,482 in 2006 and the average deal size hit €119 million, only slightly higher than the previous year’s figure of €115 million.

Commenting on the data, Tom Lamb, Co-Head of Barclays Private Equity said: “The European market was at record levels half-way through 2007 with total value reaching €98.2 billion, but the second half fell to its lowest level since 2005, at €73.2, showing the extent of the slowdown across Europe.”  Explaining the difference in fortunes between the UK and the Continent, Lamb added: “Even taking Alliance Boots out of the UK numbers, the UK market still managed to show significant growth from 2006, despite the huge fall in activity in the final quarter.”

Mark Pacitti, Corporate Finance Partner at Deloitte, adds: "Analysis of deals by sector reflects the wider macro-economic trends and slow down in consumer confidence. Leisure and Food & Drink deals were down by 54% and 40% respectively. Conversely, non-cyclical sectors such as Business & Support Services (up by 51%) and Healthcare deals (up by 27%) are performing better.”

Other findings include:

• The number of mega deals above €1000 million reached 37 in 2007 compared to 36 in 2006.
• The amount of debt in buy-out financing has increased gradually and reached a record 53.2 per cent in 2007.
• There were 24 public-to-private buy-outs in the UK worth €28.7 billion compared to 21 in Continental Europe worth €9.5 billion.
• Buy-outs in Central and Eastern Europe continue to grow, reaching €2.1 billion from 49 deals

Notes to Editors:

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

Mark Pacitti, Deloitte    +44 (0)20 7303 5871
Tom Lamb, Barclays Private Equity +44 (0)20 7773 2541
Pamela Shabi, Deloitte   +44 (0)20 7303 0587
Christopher Dean, Lawson Dodd   +44 (0)20 7535 1355

Download our full press release Continental buyout market contracts but total European value is boosted by UK (PDF, 208 KB) for supporting tables

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