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UK middle-market buy-outs on a three year high

UK middle-market buy-out activity remained strong in the second quarter of 2004, according to figures released by KPMG's Private Equity Group. A total of 26 deals valued at under £250m were completed with a total value of £1.8bn, representing the market's best performance since Q3 2000.

'It is very encouraging to see the UK middle-market in such a liquid and healthy state,' said Charles Milner, head of corporate finance at KPMG Private Equity. 'The overall sentiment is one of stability, where solid well run companies with attractive growth prospects are finding strong demand from a ready supply of well capitalised private equity buyers. Encouragingly, the current level of activity appears to be sustainable.'

Overall buy-out activity in the UK was also very positive in the second quarter of the year. A total of 29 deals were completed with a combined value of £4.9bn. Three deals over £250m were completed, although none surpassed the £1bn level seen in previous quarters. The larger deals were Chelsfield, New Look Group and Autobar.

'The market is well up on a like for like basis over last year and the underlying trend is one of robust performance,' Milner continued 'However, there is certainly no sign of the market overheating as buyers remain firmly focused on seeking quality deals.'

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