Newspaper article The Journal (Newcastle, England)

The Factors Crucial to a Build-Up of Momentum; While Small and Mid-Market Transactions Were the Flavour of the Day for Most Private Equity Acquirers, the North East Was the Setting for Many Major Deals Including the PS716m Buyout of an Ice Cream Company. PAUL MANKIN, Pictured, Corporate Finance Partner at PwC Newcastle, Looks at the Deals Activity for the First Half of the Year

Newspaper article The Journal (Newcastle, England)

The Factors Crucial to a Build-Up of Momentum; While Small and Mid-Market Transactions Were the Flavour of the Day for Most Private Equity Acquirers, the North East Was the Setting for Many Major Deals Including the PS716m Buyout of an Ice Cream Company. PAUL MANKIN, Pictured, Corporate Finance Partner at PwC Newcastle, Looks at the Deals Activity for the First Half of the Year

Article excerpt

Byline: PAUL MANKIN

ALTHOUGH there is still some nervousness around UK economic stability and the timing of a recovery, the value gap between buyers and sellers in the M&A market has narrowed slightly.

This has resulted in an increased level of confidence in future activity levels in the deals market, according to the PwC Deals Index.

Published in March this year, it indicated that UK M&A activity will increase slightly over the next six months.

However, current global and UK deal volumes reported by Dealogic and Experian respectively show decreases for the first half of 2013, although in both cases, deal values are slightly up.

Our analysis of the North East shows that M&A activity remained comparable with the first six months of last year, with 93 transactions completing, compared with 92 during the same period in 2012.

However, comparing deal values in the region can be inaccurate, as figures are readily distorted by a single large transaction.

Though if we compare the number of completed transactions with disclosed deal values between PS1m and PS50m, the first half of 2013 holds up well with 12 deals compared to 11 in 2012.

There are an equal number of larger transactions (less than PS50m) with three completing in the first six months of both this year and the previous one.

Although private equity (PE) acquirers continue to favour small and mid-market transactions, the largest deal of the year so far was the PS716m secondary buy-out of R&R Ice Cream by the French private equity firm PAI Partners.

The private label ice cream company based in Northallerton, was established in 1985 as Richmond Ice Cream.

Following a number of acquisitions and the merger with Treats Group plc and its subsequent listing in 1998 to become Richmond Food plc, the company was acquired by Oaktree Capital in 2006. R&R Ice Cream's latest acquisition completed post the secondary buy-out, when the PS49m takeover of Fredericks Dairy was cleared by the Office of Fair Trading. …

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