DEAL
It was, not suprisingly, a tough year for deals, but some still happened.
ABSENT TRENDS
Mega-deals were absent in 2002 but the picture was not quite as depressing in the mid-market, reports Jim Pendrill
What to make then of 2002? Well, against the backdrop of world recession, plunging stock markets, severe pressure on company profitability and a high level of company failures, it was always going to be a challenge. But then again, one person's downfall is always an opportunity for someone else, so it was never going to be all gloom and doom.
However the latest figures from the Nottingham-based Centre for Management Buyout Research (CMBOR) - always a good indicator of current market trends - show that a large amount of uncertainty persists not only in the buyout market but further afield too as we welcome in a new year.
Buyout deal value remained subdued in the first nine months of 2002, reaching just £312.7bn compared with £317.3bn in 2001. Yet buyouts provided almost half of all UK M&A value in the first half of the year demonstrating, as CMBOR concludes, "the relative robustness of buyout activity at a time of slowdown in the corporate sector".
Management buy-ins (MBIs) also continued to provide the major share of market value, providing more than 70 per cent of total market value in the first nine months. Management buyout (MBO) total values were well down. Proof of the continuing popularity of the MBI route was shown by the deal which saw David Grove's Grove Industries complete an £311m acquisition of Tractiv, an international distributor of tractor and agricultural equipment parts, with MBI candidate Anthony Howat.
But national statistics are always influenced, and some would say unfairly weighted, by the mega-deals which were singularly lacking in 2002. If you take away the larger institutional buy-outs and takeovers then the picture is arguably not quite as depressing in the mid-market, where the vast majority of deals relating to either Midlands companies and/or Midlands advisers still sit.
So what has been the picture in the Midlands over the past 12 months? Well, despite the perceived gloom that hangs over the market one has to say that the picture is nowhere near as depressing as one might think.
To pick just a few positives the region has maintained a steady flow of traditional buyouts; seen a number of more innovative secondary buyouts (SBO) really begin to hit radar screens; and also been witness to some of the most high profile acquisitions (both nationally and internationally) of the past 12 months.
For the full Deals review read on...
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