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Record first half for UK private equity after slow start, says study

The UK private equity market has picked up significantly after a slow start to 2007, according to the Centre for Management Buy-out Research at Nottingham University Business School, a pro

The UK private equity market has picked up significantly after a slow start to 2007, according to the Centre for Management Buy-out Research at Nottingham University Business School, a provider of analysis on the UK buy-out market founded by Barclays Private Equity and Deloitte.

Excluding the Alliance Boots mega-deal, the total value of buyout activity in the first six months of the year was GBP13.9bn, up by 31 per cent from the first half of 2006. Including Alliance Boots, the first half total was already more than GBP25bn, close to the record full year total of GBP26.5bn in 2006.

‘After a sluggish start to the year private equity completions have bounced back in Q2 and we may well achieve a record GBP40bn by the end of 2007,’ says Deloitte corporate finance partner Mark Pacitti.

‘Notwithstanding continuing concerns over consumer confidence on the high street, we have also seen a number of large scale secondary retail buy-outs this year including Fat Face, Threshers and Jimmy Choo.’

Tom Lamb, co-head of Barclays Private Equity, says: ‘The Alliance Boots deal is a landmark event as it is the first buy-out of a FTSE100 company.’ Although the deal was the largest-ever European buy-out and was 50 per cent bigger than the next largest European deal, last year’s EUR13bn buyout of Danish telecom business TDC, it is only the fifth largest buy-out of all time on a global basis.

‘It remains to be seen whether the Alliance Boots deal will open the floodgates for more FTSE100 buy-outs,’ Lamb adds. ‘The firepower is certainly there with fundraising remaining at record levels.’ Fundraising is already at nearly GBP11bn so far this year, more than half the record total of GBP20.2bn in 2006.

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