UK private equity spends big after Brexit slump

Buyout values totalled €27.1bn across 181 deals this year, up from €14.7bn across 398 transactions in 2016, according to data from CMBOR.

Private equity has doubled its spending in the UK following a post-Brexit referendum lull in deployment.

UK private equity-backed buyouts totalled €27.1 billion across 181 transactions this year, up from €14.7 billion across 188 completed deals in 2016, according to data from CMBOR at Imperial College Business School, sponsored by Equistone Partners Europe and Investec Specialist Bank. Exit activity also climbed to €38.5 billion from €28.5bn last year.

The UK recorded six mega-deals – those valued at more than £1 billion ($1.3 billion; €1.1 billion) – in 2017, more than the two recorded last year. The average deal value returned to a pre-crisis high of €150 million, up from €126 million in 2016.

“The UK saw a bit of a paralysing effect due to Brexit, so 2016 was a bit of an aberration,” Tim Wright, head of European private equity at law firm DLA Piper, told Private Equity International. “I’d expect something slightly down on these 2017 figures in 2018 as we get closer to the actual Brexit event.”

UK growth helped total European deal values reach €90.2 billion for 2017, up by 50 percent from 2016’s €60.8 billion. Germany and France also enjoyed significant boosts, with the former’s total buyout value almost tripling to €17.7 billion and the latter growing to €14.1 billion from €11.4 billion last year.