Strong final quarter offers glimmer of hope to dealmakers

The total value of private equity-backed buyouts in Yorkshire and Humber fell by more than threequarters (78 per cent) to 305.4m in 2009, from 1.4bn in 2008, according to the latest data from the Centre for Management Buyout Research (CMBOR), sponsored by Barclays Private Equity.

This was the lowest annual buyout value seen in the region since 1993.

The number of private equity-backed buyouts also declined in 2009, falling to the lowest level since 1992 with 48 deals completed in the region, representing a 28 per cent decline compared with 2008 (67) and a 38 per cent drop compared with 2007 (78). In addition, the average deal value in Yorkshire and Humber fell by 69 per cent to 6.4m when compared with 2008 (20.9m).

However, the fourth quarter of 2009 revealed signs that confidence was returning.

This period saw a 125 per cent increase in private equity-backed buyouts in the region to 155m, up from 69m in the third quarter.

The fourth quarter contributed 51 per cent of the total 2009 value of buyouts in Yorkshire and Humber.

These figures were propped up by the estimated 110m buyout of Callcredit Information Group in December, which represented 36 per cent of the total deal value for the region in 2009.

Small deals made up the bulk of buyout activity in Yorkshire and Humber in 2009, with 85 per cent of deals valued at under 10m. These buyouts totalled 61m in the region in 2009. Buyouts in the lower-mid market (10m to 100m) comprised 13 per cent of the total number of buyouts in Yorkshire and Humber, compared with 15 per cent in 2008 and 32 per cent in 2007.

The manufacturing sector generated the highest number of deals in the region in 2009, with 12 completed transactions. The financial services sector was the largest contributor by value, totalling 114m and contributing 37 per cent of the total value for the region.

Steve O'Hare, director at Barclays Private Equity in the North, said: "As seen across the UK, the end of the decade saw very low levels of buyout activity in Yorkshire and Humber, with a recovery failing to materialise, particularly in the mid-market.

"However, while the Yorkshire and Humber deals market faced a number of challenges in 2009, the fourth quarter saw signs of optimism returning to the market, buoyed by the Callcredit Information Group deal.

"While the strong finish to 2009 is extremely positive for the Yorkshire and Humber deals market, maintaining that momentum during an election year will be the main challenge for the region's private equity houses, banks and advisers. However, initial levels of activity in 2010 have been encouraging."