The value of public to private deals has hit £4.9 billion, already the highest level since 2000, according to the Centre for Management Buy-Out Research (CMBOR), the pre-eminent provider of analysis on the UK buy-out market.

Sponsored by Barclays Private Equity and Deloitte, the figures are the most comprehensive compilation of UK buy-out data for 2005. They show that public to private buy-outs and buy-ins account for 45 per cent of the value of all deals in the first half of 2005 in comparison to 17 per cent for the whole of last year. The average size of a deal is almost £500 million compared to between £100 - £200 million in past years.

Tom Lamb, Co-Head of Barclays Private Equity, says: “Total deal value in the first six months of 2005 has already reached £11.3 billion compared to £8.2 billion over the same period last year. Of this, six of the 10 top deals were public to private. This means we’re on track for a record year for public to privates which looks likely to exceed the previous record of £9.4 billion in 2000.”

While public to private deals have surged, the value of other deals, including secondary buy-outs, has also increased, rising by 18 per cent to £6.4 billion compared to £5.4 billion during the same period last year.

Mark Pacitti, Corporate Finance Partner at Deloitte, adds: "In addition to the increase in public to private deals, the rest of the market has grown by a healthy 11 per cent compared with the same period last year. Secondary buy-outs have continued their prominence and represent almost half of the private company deal value: £2.8 billion of £6.4 billion.  Despite economic fears and debt market concerns, the secondary market is showing few signs of faltering.  We predict this level of secondary activity to continue throughout 2005 and into 2006.”

The half year figures also show the retail/consumer sector has fallen out of fashion with completions at £255 million in the first half against £2.5 billion in the entire previous year.  In contrast, the healthcare sector is going from strength to strength benefiting from macro-drivers such as the ageing population and concerns over the NHS.  To date there have been 15 healthcare buy-outs worth £3.4 billion in comparison to just £1.5 billion during the whole of 2004. Half of all deal value in the first six months is from the healthcare and leisure sectors.

Concurrently there is more money chasing fewer opportunities.  Private investors are using the buy-out model and hedge funds are also fighting their way onto the pitch.

Key Findings:

• London has seen the highest number of buy-outs so far this year at 42, with the North West standing at 39 and the South East at 35 deals.
• This is the fourth quarter in a row where the value of buy-outs and buy-ins has been greater than £5 billion.
• The average deal size over £10 million now stands at £124 million in comparison to £100 million last year.
• The number of MBO/I flotations has dropped to seven in the first half of 2005, compared to a full year total of 30 in 2004; its unlikely that last year’s level of activity will be reached.
• This first half of this year has seen 136 exits recorded to date, valued at £4.8 billion.
• The four largest non-float exits so far this year have all been secondary buy-outs.

Ends

Notes to Editor
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.

Tom Lamb
Barclays Private Equity 
Tel: 020 7773 2541 / 07770 613 447

Mark Pacitti
Deloitte    
Tel: 020 7303 5871 / 07768 574 631

Tricia Defty / Jane Kirby / Lawson Dodd 
Tel: 020 7535 1355 / 07930 353 476 / 07990 543 886

Sorrelle Cooper
Deloitte   
Tel: 020 7303 4820 / 07932 078 218

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP.

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