32 UK public to privates in 2001

The UK PTP market has had another strong year in 2001, marking the start of a trend that looks set to continue, according to new research from CMBOR.

According to the research published by the Centre for Management Buyout Research, private equity investors helped 32 UK companies to de-list from the stock market in 2001, investing in deals worth £4.9bn. Whilst in terms of value last year fell short of the record set in 2000, but that year included the £3.5bn MEPC deal, which accounted for more than a third of the public-to-private deals completed in that year.

As a proportion of the total number of buyouts completed, the public to private segment of the market has remained fairly constant during the past three years at around seven per cent. In 2000, the number of completed PTPs was also 32.

The largest deal in 2001 was the de-listing of Burford for £920m in January. This was one of a series of nine property deals after interest in the sector had begun in 2000 when there were seven such transactions.

Outside the property sector, the second largest deal was the de-listing of automotive parts manufacturer Britax for £441m in August. This was followed by the buyouts of house-builder Fairview for £307m and health club operator Cannons for £260m.

The research, co-sponsored by Barclays Private Equity and Deloitte & Touche Corporate Finance, added that 2002 was going to be another good year for public to private transactions. Chris Ward, head of advisory services at Deloitte & Touche corporate finance, said that with more than 1000 UK quoted companies with a market capitalisation of under £1bn, there was still a large population of potential targets.

“[This], in present economic conditions, will undoubtedly mean that 2002 will be a year where increasing numbers of companies will de-list and go private”, said Ward

According to Tom Lamb, managing director of Barclays Private Equity, public to private deals are not all smooth sailing. Lamb pointed to exit data collected to date, which suggests that public-to-private returns are likely to be much more volatile than normal buyouts. “Although these deals tend to exit more rapidly, the slug in the lettuce is that receiverships account for 25 per cent of the exits in the last five years,” he said.