• Home
  •  
    Regions
    • Europe
    • UK & Ireland
    • DACH
    • Nordic
    • France
    • Southern Europe
    • Benelux
    • CEE
    • Asia
  •  
    Deals
    • Buyouts
    • Venture
    • Exits
    • Refinancings
    • Build-up
    • Turnaround
    • Secondaries
    • Advanced deals search
  •  
    Funds
    • Buyout
    • Venture
    • Mezzanine
    • Debt
    • Funds-of-funds
    • Secondaries
    • Fundraising pipelines
    • Advanced funds search
  •  
    GPs & LPs
    • GP profiles
    • LP profiles
    • GP news
    • LP news
    • Sponsors search
    • LPs search
  •  
    Secondaries
    • Deals
    • Funds
    • News
    • Analysis
  •  
    People
    • People moves
    • Analysis
    • In Profile
    • Q&A
    • Videos
    • Comment
  •  
    Analysis
    • In Profile
    • Fundraising
    • Q&A
    • Comment
    • Videos
    • Podcast
    • Reports
    • Data Snapshots
  •  
    Unquote Data
    • Deals search
    • Exits search
    • Funds search
    • Sponsors search
    • Advisers search
    • LPs search
    • League tables
    • Reports
  • Sign in
  • Sign in
    • You are currently accessing unquote.com via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0)203 741 1137

      Email: Georgina.Lawson@acuris.com

      • Sign in
     
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
  • Follow us
    • Twitter
    • LinkedIn
  • Free Trial
  • Subscribe
Unquote
Unquote
  • Home
  • Regions
  • Deals
  • Funds
  • GPs & LPs
  • Secondaries
  • People
  • Analysis
  • Unquote Data
  • You are currently accessing unquote.com via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0)203 741 1137

    Email: Georgina.Lawson@acuris.com

    • Sign in
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
Unquote
  • Data Snapshot

UK buyout activity sets new record in Q1

UK & Ireland buyout activity
  • Greg Gille
  • Greg Gille
  • @unquotenews
  • 08 April 2021
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  
  • Q1 volume figure is a 16% increase on an already exceptionally busy Q4 total, and a 58% uptick on the 62 deals inked in Q1 2020
  • Nearly all of the quarter-on-quarter dealflow increase came from small-cap deals valued at less than £50m
  • CGT rate fears fuelled primary deals sourced from family/private vendors

The volume of buyouts inked in the UK and Ireland boomed in Q1, vastly outpacing previous first quarters and setting a new quarterly record, Unquote Data shows. Greg Gille reports

The UK buyout market is truly back in full swing, according to preliminary figures from Unquote's proprietary database. Fuelled by pent-up appetite to invest on the PE side, as well as a rush for vendors to complete deals before a potential capital gains tax (CGT) hike in the March budget, the market saw a record volume of buyouts in the first quarter.

The UK and Ireland were home to 98 transactions between January and March (often reflecting processes initiated and progressed in Q4 last year), for an aggregate enterprise value of £14.1bn. The volume figure is a 16% increase on an already exceptionally busy Q4 total, and a 58% uptick on the 62 deals inked in Q1 2020 – although it has to be noted that the sharpest increase in recent months happened in Q4 2020, with volume more than doubling and aggregate value more than tripling compared with Q3.

Q1 2021 has now set a new all-time record for quarterly buyout activity in the UK, beating the previous record set in Q4 last year (84 deals). The busiest quarter in the decade prior to that was Q3 2019, with 74 deals recorded.

"We went into the start of the new year with as strong a pipeline as we've ever had," a partner at a small-cap GP tells Unquote. "The potential CGT rate hike may have been somewhat of a false deadline giving a sense of urgency, but the pipeline continues to build and we are still seeing a lot of attractive opportunities out there. Entrepreneurs are really focused on what they want out of a financial partner, and advisers have also upped their game when it comes to running tailored, focused processes for these businesses."

The amount of dealflow in the past six months underscores how much dry powder is left in the coffers of PE players targeting the UK market. In the past five years (which would be the typical investment period of a traditional closed-ended fund), Unquote has recorded 137 final closes of UK-based buyout vehicles, for aggregate commitments of €218bn.

The aggregate value of deals in Q1 this year did not increase commensurably with the volume uptick, though. At an estimated £14.1bn, the figure is £4bn short of Q4's total, and roughly in line with pre-pandemic quarterly totals. This is not surprising when almost all of the dealflow increase compared with Q4 came from small-cap deals valued at less than £50m (53 in Q1 2021 vs 43 in Q4 2020), although it has to be noted that there were seven deals valued between £250-500m in Q1 against just three in Q4 last year.

Activity at the upper end of the market (EVs of £500m and up) was virtually identical quarter-on-quarter, and very much in line with typical pre-pandemic levels, which would go some way towards explaining the fairly standard aggregate enterprise value seen in Q1.

Volume of UK buyouts by sector

 

When it comes to deal sourcing, the starkest increase in absolute terms in Q1 came courtesy of family and private vendors – This was unsurprising, given the uptick in dealflow at the smaller end of the market, and lends credence to the view that a mooted CGT rate hike drove a number of entrepreneurs to seek deal completions before March.

Nevertheless, the proportion of UK and Irish deals sourced from such vendors in Q1 (55%) was very much in line with historical standards. If anything, the proportion of secondary buyouts increased (to 31% of all Q1 buyouts, versus 27% when looking at the past five years). This is down to both a solid recovery of such deals in absolute numbers – indicating a renewed appetite to exit portfolio companies after a near-total pause in Q2 and Q3 last year – and to a shortage of deals sourced from corporate vendors. Carve-outs were down to 9% of dealflow in Q1, against 14% over the previous three years.

Correspondingly, the number of PE exits recorded by Unquote rose sharply in both Q4 2020 and Q1 2021, hitting a three-year high of 80 deals in the latter. That said, and unlike what was seen for buyouts, the Q1 total was met or exceeded at several points in 2018, 2017 and 2015. It would seem that, for now at least, UK PE firms remain more firmly in buy mode, even though improved visibility on company financials post-outbreak and strong buy-side appetite should continue fuelling a cash-out on the best performers in portfolios.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  
  • Topics
  • Data Snapshot
  • UK / Ireland
  • Buyouts
  • Unquote Data
  • Market Insight

More on Data Snapshot

European sponsor buyout activity at its lowest level since 2H12
Sluggish PE market struggles with deal execution, braces for pent-up demand wave

Financing challenges and valuation discrepancies have stymied deal count and volume, but hopes pinned on 4Q 2023 and beyond

  • Investments
  • 19 July 2023
EMEA Financial Sponsor Exits
Slice of pie: New entrants gobble up GP stakes in Europe

Armen, Hunter Point Capital, GP House and Axa IM rustle up new minority investments, as Inflexion and Coller sell

  • Data Snapshot
  • 25 April 2023
Q1 2023 lowest first-quarter for VC fundraising since 2013
VC fundraising sinks further with lowest Q1 in a decade

Eight European firms secured just over EUR 2bn in commitments in Q1 2023 as continuing uncertainty suppresses LPs’ risk appetite, but fundraising pipeline looks promising

  • Fundraising
  • 14 April 2023
Private equity buyouts see worst start to year since 2009
Spending bottom dollar: Valuation gaps take Q1 buyout levels back to 2009

Sponsors make just 95 buyouts in Europe in the first quarter - a figure not seen since Sony sold 12m floppy discs in one year

  • Data Snapshot
  • 12 April 2023

Latest News

Fund closes in US dollars
  • Funds
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme

Multi-family office has seen strong appetite, with investor base growing since 2016 to more than 90 family offices, Meiping Yap told Unquote

  • 05 September 2023
Clinical trials and biotechnology
  • Buyouts
Permira to take Ergomed private for GBP 703m

Sponsor deploys Permira VIII to ride new wave of take-privates; Blackstone commits GBP 200m in financing for UK-based CRO

  • 04 September 2023
Public sector software
  • Exits
Partners Group to release IMs for Civica sale in mid-September

Sponsor acquired the public software group in July 2017 via the same-year vintage Partners Group Global Value 2017

  • 04 September 2023
EMEA Public to Private M&A
  • Investments
Change of mind: Sponsors take to de-listing their own assets

EQT and Cinven seen as bellweather for funds to reassess options for listed assets trading underwater

  • 04 September 2023
Back to Top
  • About Unquote
  • Advertise
  • Contacts
  • About Acuris
  • Terms of Use
  • Privacy Policy
  • Group Disclaimer
  • Twitter
  • LinkedIn

© Merger Market

© Mergermarket Limited, 10 Queen Street Place, London EC4R 1BE - Company registration number 03879547

Digital publisher of the year 2010 & 2013

Digital publisher of the year 2010 & 2013