Number of UK club deals reaches three year high – Pinsent Masons

Eliza Punshi
26 April 2021

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The value of UK private equity club deals, where two or more private equity or trade buyers jointly acquire a company, jumped to £19.7bn in 2020/21 as investors looked to target higher value acquisitions, law firm Pinsent Masons has found.

According to the law firm, the figure is up fourfold from the £4.5bn in the previous year. The volume of such deals reaching a three-year high, with 56 deals last year, up 30% from 43 the year before.

Club deals became favourable for numerous reasons, said the law firm, including sharing risk and decision making, making it easier to buy larger businesses with stable cash flows, and reducing the need for high leverage on deals.

Alasdair Weir, partner at Pinsent Masons, said club deals had "become attractive to investors in the current climate where significant uncertainties remain".

Deals involving more than two GPs providing equity could reduce the amount of leverage needed, with sellers typically more receptive to a purchaser that did not have to arrange a large debt financing.

Recent deals in the UK include the £6.8bn acquisition of Asda in October last year by the Issa brothers and TDR Capital, and the planned £3.4bn takeover of Signature Aviation by Blackstone Group and Carlyle Investment Management.

The law firm added that the amount of money that GPs need to deploy means they are willing to be flexible looking at both club bids and co-investments.