UK mid-market exits more than trebled in 2010

Riding the wave of improving economic conditions, the UK mid-market recorded £1.7bn-worth of transactions in 2010.

Investors in UK mid-market shops found good cause to ring in the New Year with festivities. Last year there were 42 mid-market deals worth a combined £1.7 billion ($2.7 billion; €2 billion) for private equity transactions in the £10 million to £100 million bracket. A healthy jump from 2009 when a mere 17 deals worth £499 million were recorded, according to recent research from Lyceum Capital and Cass Business School.

Private equity firms found the most opportunity for divestment from trade buyers, which accounted for 69 percent of all exits in the UK’s mid-market.

Fears of an economic relapse were overblown and many businesses have emerged from the financial crisis in excellent position to trade and expand, said Andrew Aylwin, partner at Lyceum Capital in a statement.

There is a bed-rock of SMEs requiring capital to consolidate their performance and complete the transformation into more mature, high-growth enterprises

Andrew Aylwin

“The number of exits to trade buyers supports this, demonstrating the impact of private equity on the quality of companies’ operations and long-term strategic attractiveness,” Aylwin added.

Although not all was solid news, the much anticipated resurgence of the IPO market remained on pause. Only one exit was achieved via a public listing, the same lonely figure recorded for IPOs in 2009. The balance of exits were to secondary buyouts, the report noted.

Looking forward the long-term investment prospect for UK’s mid-market looks positive, says Aylwin. “There is a bed-rock of SMEs requiring capital to consolidate their performance and complete the transformation into more mature, high-growth enterprises.”