UK share of European market falls

14 April 2003

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The Europe Buyout Review, published by Initiative Europe and Bridgepoint Capital, has found that the value of UK buyouts accounted for 37% of the European total last year, compared with 57% in 1998. The UK accounted for 44% of volume, a 5% decline from 2001 and a 9% decline from 1998. Continental Europe as a whole showed a marked increase, with France attracting the highest level of activity, with deals totalling EUR 12.8bn. In Italy, the private equity market grew six-fold to EUR 3.9bn, while in Germany investment fell by 50% to EUR 5.4bn. The average size of European public-to-private deals has doubled in the last five years from EUR 262m in 1998 to EUR 526m in 2002, reflecting the long-term trend for small and medium sized companies to de-list. But the volume of P2Ps in the UK has fallen from its 1999 peak of 28 to just 11 in 2002. Over the last five years, 36% of European vendors of private equity-backed businesses have been family owned and 29% have been domestic firm divestments. In 2002, the proportion of buyouts in the mid market (EUR 50m to EUR 250m) increased to over a quarter from 18.5% in 1998. The survey demonstrates the increasing popularity of the retail sector among private equity investors. In 2002, investment in European retail buyouts reached EUR 5.3bn, compared with EUR 2.5bn in 2001. The number of UK retail deals more than doubled to 13 from five the year before, and included the likes of Halfords, Jessops and Homebase. Over the last five years engineering has been Europeâ€™s most popular sector, but only 42 such deals were completed last year compared with a peak of 145 in 1998.