UK Watch: Q1 deal volume drops off

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01 May 2014

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Despite an uptick in dealflow in the second half of 2013, which caused many to believe the recovery was in full swing, deal volume in the first quarter of this year has been lacklustre, according to the latest unquoteт UK Watch, published in association with Corbett Keeling.

The latest results from the unquote" quarterly industry survey found that the volume of larger deals (those with an enterprise value of £150m or above) fell to just seven in the first three months of 2014, down from 13 in the previous quarter. Furthermore, the total value of these transactions also dropped sharply to £2.59bn in the first quarter of this year, compared with £4.04bn in Q4 2013 and £5.22bn in Q3 2013.

The volume of deals valued at less than £150m fell only slightly with 28 transactions recorded, compared with 33 in the previous quarter. Overall deal value also decreased to £1.01bn in the first three months of the year compared with £1.42bn in the last quarter of 2013.

However, the early-stage and growth capital segments paint a much brighter picture, with both deal volume and value on the up. In terms of volume, there was an impressive 93 deals recorded for Q1 2014 compared with 81 transactions completed in the final quarter of last year. For overall deal value, the first quarter of 2014 saw £1.11bn worth of early-stage and expansion deals, up from £729m in Q4 2013.

Despite decreased activity on the buy-side, it is the exit market that is bringing about a new wave of positivity. According to the survey, almost three quarters of respondents expect a steep rise in the number of exits over the coming year, thanks to a large backlog off assets ready to be sold.

Read the full report in the unquote" UK Watch, in association with Corbett Keeling.