The £2bn exit by the Japanese bank Nomura from Britain's pub industry last week injected fresh life into the waning buyout market, a survey has found.
The deal, which saw Nomura offload 4,189 pubs to a private-equity consortium led by Cinven, lifted the total deal value for the three months to March to £3.65bn, nearly £2bn higher than the previous quarter, said the Centre for Management Buyout Research.
While still well down on the record £5.8bn start to buyout activity in 2001, Mark Pacitti, a private-equity partner at Deloitte & Touche, which co-sponsored the research with Barclays Private Equity, said the Cinven deal would give private-equity buyers more confidence.
But he added that the pubs disposals had skewed the figures and said a significant upturn in completed transactions was unlikely before the second half of this year. "There is plenty of activity brewing ...[but] most investors are in no hurry to actually push deals through to completion," Mr Pacitti said.
The buyout market fell away sharply in the second half of 2001 as private-equity houses put deals on hold while company valuations plummeted. The total buyout value for 2001 dived by 20 per cent from the year before to £19.3bn – the first year-on-year drop since 1993.
Tom Lamb, the UK managing director at Barclays Private Equity, said deals would not resume until both profits and earnings visibility had returned to those businesses up for sale.Reuse content