PE-backed buy-outs bolster UK M&A activity in 2011

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The total value of UK mergers, acquisitions, flotations, rights issues and placements was £229bn in 2011, an increase of 11 per cent on 2010. The overall volume remained fairly constant, dropping by only two per cent, according to a recent study by Experian Corpfin.

The study found that the value of UK large transactions (those exceeding £100m in value) where a consideration was disclosed was up by 13 per cent to £201bn in 2011, with the volume of transactions (300) identical year-on-year.

BDO International has been the most active financial advisor by volume with 83 deals, while Citigroup topped the value league with deals worth a total of £48bn. The leading legal advisors were DLA Piper (126 transactions) and Sullivan & Cromwell (£43bn total deal value from 13 transactions).

The study also found that 45 per cent of all European transactions involved a UK firm, while the UK contributed to a 37 per cent of the total value of European deals during 2011. During 2010 the UK was represented in only 39 per cent of the European M&A activity and 31 per cent of the value.

For Europe and the rest of the world, the total value of European transactions in 2011 was £618bn, a decrease of eight per cent on the 2010 values. There were 16 per cent fewer transactions during this year with 9,579 compared to the 11,353 witnessed in 2010.

In the US volumes were down in the year by 23 per cent, while values were up by seven per cent. Asia Pacific witnessed declines in both volume and value during 2011, by 13 per cent and 17 per cent respectively.

Wendy Smith, business development manager at Experian Corpfin, said, “A 20 per cent increase in the volume of private equity backed buy-outs means that UK M&A deal activity has remained relatively robust in 2011, with a notable increase in the total value of deals – especially at the large end – against stable volumes. There still appear to be good opportunities for investment and growth across the country.”

The full study can be found here.