Caution wins out as deal value slumps

Average deal value for Yorkshire slumped from £157.2m in the first six months of 2010 to £12.8m in the same period of 2011.

The number of deals fell from nine to five over this period.

Sachin Date, of research sponsor Ernst & Young, said: “Interestingly this caution has been less evident in Europe where Germany, France and Spain have remained strong against a declining UK share of the European buyout market.”

Steve O’Hare, of fellow sponsor Barclays Private Equity, said buyout activity is likely to remain subdued in the second half of the year.

He added: “If this proves to be the case the UK buyout market will be operating at a level last seen in the late 1990s, but with much more committed capital waiting to be invested.

“So while the buyout market has already exceeded 2009’s full year activity and is certainly recovering, it is clear that sentiment in the industry remains cautious particularly around asset pricing and competition from both PE houses and an emerging stream of trade buyers.”