Insider Media Limited

Private equity deal making is on the up return in the East Midlands, according to research by the University of Nottingham-based Centre for Management Buy-out Research (CMBOR). Buyouts backed by private equity investors in the region totalled £874m in 2010, compared to a total value of £61m in 2009. However, experts warned that the recovery is still “well short” of peak level.

There were 11 private equity deals completed in the East Midlands in 2010, five more than the previous year.

However, the region has not lived up to its private equity back deal making peak of 2007, wherein 24 deals were completed, amassing a total worth of £1.17bn. In the previous year, private equity back deal activity totalled £1.4bn through 17 transactions.

Across the UK, there were 164 buyouts backed by private equity in 2010 with an overall value of £18.2bn. This compares with a total number of 122 in 2009 with a value of £4.7bn, according to research by CMBOR, which is sponsored by Ernst & Young and Barclays Private Equity.

Paul Harper, investment director at Barclays Private Equity’s Midlands’ office, said the overall increase was welcome news after a trying two years for the industry.

“We have seen a strong recovery in deals over £500m and the fact that nearly 25 per cent of deals are above £100m is a good sign.”

However, Harper issued “a note of caution” beneath the headline figures.

He said: “Market value statistics are often distorted by a small number of very large transactions, the increase in deal volumes is a more accurate reflection of underlying activity in the region. The good growth in deal volumes over 2009 is encouraging and supports our expectations of a longer term sustained increase in activity.”

Manufacturing was the largest sector by value in 2010 with a combined, UK-wide value of £5bn. The volume of buyouts in this sector was 31 compared to 26 in 2009, down from 69 in 2008.