UK buyout pipeline filling up

An increasing number of high-profile buyout targets reflects a re-awakening of the buyout market.

There are signs that the European buyout market is finally coming back to life, with international private equity house currently mulling bids for industrial assets particularly in the UK. Activity reported in the course of the weekend suggests that uncertainty among financial investors is now giving way to a keen interest in putting money to work.

Among the UK companies courted by private equity houses is stricken telecoms group Energis. Michael Grabiner, the group's former chief executive and and new recruit at Apax Partners, is believed to be considering a bid. According to the Sunday Times, a number of other financial buyers are considering tabling offers for the  company which would value it at around £1bn. Following last week's collapse of the Energis share price, the group's market capitalisation currently stands at circa £50m.  

Meanwhile Cendant, the financial services group, is close to completing the sale of NCP, the UK’s largest car park company. First round bids are to be submitted by the end of February, with US private equity firm Blackstone believed to be among the frontrunners. Bids for the car park firm are expected to top £700m. 

Negotiations involving various UK-based private equity firms are porgressing over the sale of Kwik-Fit, the UK car repair chain put up for sale by Ford. The Financial Times reports that three UK bidders, understood to be Cinven, CVC and DB Capital Partners are among those preparing bids for Kwik-Fit. Ford is hoping to raise about $1bn for the division although industry analysts believe that the division will sell for no more than $800m. 

In the UK insurance sector, GE Capital, the private equity arm of General Electric of the US, is evaluating a possible £1.3bn bid for the life insurance arm of UK insurer Royal & Sun Alliance. This will be GE Capital’s second attempt to buy the business, having previously walked away from a deal in 2001 after a disagreement over price with R&SA chief executive Bob Mendelsohn.

In the leisure industry, Nomura's two remaining pub chains, Unique and Voyager, are the targets of a bid from Enterprise Inns. If the £2bn bid is successful it would double the size of Enterprise's estate to 7,800 pubs. It is thought that Enterprise hopes to secure a deal to manage the pubs with banks taking a majority stake.