CMBOR report says UK exits to break record

15 November 2004

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Despite being only nine months into 2004, exit value in the UK has been confirmed as the highest ever recorded. According to figures published today by Barclays Private Equity and Deloitte, exit value for the year to date has reached a staggering Â£13.7bn, compared with a total of Â£8.8bn for the whole of 2003. The 63 secondary buyouts and a smattering of large-scale trade sales have attributed to this record-breaking performance - both in terms of value and volume. When combined with the raft of new listings (21 completed in the first nine months compared to a quiet 2003 when nine were completed) the figures speak for themselves. These statistics complement a more in-depth report, Exit, which has also been published. Exit, compiled by the Centre for Management Buyout Research (CMBOR), takes a comprehensive look at the exit environment, providing an assemblage of data on investments made and realised over the last 20 years. The Exit report shows that the average time to exit steadily increased throughout the 1990s from around 42 months to more than 70 months by the end of 2003. This is longer than the typical target exit period for buyout investment, normally put at between 36 and 60 months. Contrary to this however, the first half of 2004 has seen a reduction with the average time to exit to just over 61 months. This is a welcome indication that the backlog of exits, accumulated during the M&A 'lull' since 2000, might be starting to clear. Other key findings include that following three years of rising volumes, receiverships fell during the first nine months of 2004 to 65 compared with a total of 107 in 2003. The total number of secondary buyouts, meanwhile, came close to overtaking trade sales in 2003, with the 63 secondary exits completed being just four short of the trade sale total. The first nine months of 2004 has continued in this vein with a further increase in the rate of secondary deals, producing 59, matching the number of trade sales.