MBO market starts to cool off
Shortage of quality deals begins to cool the private equity market
Shortage of quality deals begins to cool the private equity market
After a hot run that has lasted more than two years, early signs have emerged
that the private equity market has begun to cool.
Research by KPMG’s private equity group found that the number of deals worth
more than £10m in the first quarter of 2006 was at its lowest for the past 32
months.
From January to the end of March 2006, only 31 deals with a total value of
£2.9bn were completed in the UK.
Mick McDonagh, a corporate finance partner at KPMG, said the 31 deals were at
the very bottom of the expected volume range per quarter, which suggested the
MBO market was beginning to ease off.
‘This quarter is at the bottom of the range and the lack of big deals around
the billion-pound mark has had a big impact on the total and average values,’
McDonagh said.
‘I still expect other quarters this year to post some high values, but we’re
unlikely to see a step change in the number of deals.’
McDonagh said the reason for the slow down was not a lack of capital, but a
shortage of quality deals. ‘This quarter articulates very clearly the key
challenge facing the private equity market. Vendors know that the balance
between supply and demand is in their favour, which is having an impact on both
pricing and the sales process.’
The lack of successful bids for large public companies has also had an effect
on the slow start to 2006. Few offers for plcs have been accepted, as boards
hold out for high premiums from private equity bids.
The numbers you crunch tell a story. Your expertis...
18yEmbracing user-friendly AP systems can turn the tide, streamlining workflows, enhancing compliance, and opening doors to early payment discounts. Read...
View articleOrganisations can enhance their financial operations' efficiency, accuracy, and responsiveness by adopting platforms that offer them self-service cust...
View articleIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceDiscover how AP dashboards can transform your business by enhancing efficiency and accuracy in tracking key metrics, as revealed by the latest insight...
View articleWe all understand the role of lawyers in an arbitration, to argue over points of liability and who was at fault. But most commercial cases are brought...
View articleAn anonymous corporate finance veteran with over 20,000 hours of experience unlocks invaluable insights by pulling back the curtain on the rarely seen...
View articleThe UK's National Living Wage increase to £11.44/hr demands significant adjustments in payroll and reporting for accountants, impacting compliance, fi...
View articleThis regulatory update aims to simplify the reporting process, reduce administrative burdens, increase accuracy, and provide real-time reporting capab...
View articleTechnology could enable this by allowing teams to 'speak the same language' Read More...
View articleBegbies Traynor had a strong first half to its year, buoyed by increased revenue and a number of acquisitions Read More...
View articleRicky Shankar, Chairman of Clear Factor, explains how his own experience with banks led to the creation of Clear Factor - a decentralised global invoi...
View articleLooking at spending patterns of more than 1000 Spendesk users in 35 European countries, making 800,000 transactions totalling over €120million, the ‘S...
View article