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2007-a year of two halves; I association with PRICEWATERHOUSECOOPER.

Byline: Paul Mankin of PricewaterhouseCoopers LLP gives his review of last year's deals market

THE last few months of 2007 proved challenging with fears about interest rates and the tightening credit markets. The volume of deal activity in the region reflected this, with 42 transactions completing in the final quarter compared with 55, 50 and 43 for the previous three quarters of the year respectively.

Overall deal activity for the year was only marginally up on the previous year, with 190 transactions completing in the North-East, according to PricewaterhouseCoopers' analysis of publicly available information. Globally values peaked with a record of pounds 2,390bn deals announced in 2007, according to Dealogic.

The North-East followed suit with the disclosed value of transactions reaching a high of pounds 3.44bn during the year, outperforming the past three years in the region. More than half of this record total was accounted for by the acquisition of Wilson Bowden by Barratt Developments in April for more than pounds 2bn.

During the year, Helius Energy, Neville Porter and e-Therapeutics listed on the Alternative Investment Market (AIM) and Wellstream and Eaga joined the main market of the London Stock Exchange.

Stobart Group also listed after the reverse takeover of Westbury Property Fund by Eddie Stobart, resulting in a net gain of three North-East public limited companies (plcs). The current split of North-East plcs is now 23 fully listed and 24 on AIM.

The region's public companies continued to expand. Arriva was the most acquisitive, making six acquisitions, both in the UK and abroad.

Sage acquired five companies globally and James Fisher made three acquisitions during the year, including the pounds 23m acquisition of FT Everard in January.

Newer companies to the market also hit the acquisition trail with Hargreaves Services making three, and four acquisitions each for Northern Bear and Eaga.

According to the Centre for Management Buy-out Research, 2007 produced record total deal values of pounds 42.2bn in the UK buyout market despite the final three months of the year being the quietest quarter since 2003.

In the North-East, private equity activity slowed in the fourth quarter, but earlier investments included: the secondary buy-out of Brambles Foods when NGBI sold the company to Adelie Food Holdings, a company backed by Duke Street Capital; the secondary buyout of Attends Healthcare from 3i to Rutland Partners for pounds 63m; and the buyout of 4Projects by Richard Vertigan backed by August Equity.

In conclusion, 2007 deal activity in the region followed the global trend, although to a lesser degree.

The first half out-performed the second, both in deal value and volume, but the difference between the two was less significant as the North-East market is subject to few 'mega deals', which have been the most affected by the recent crisis in the credit markets.

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ACTIVE YEAR: Paul Mankin recaps some of the region's deals, totalling pounds 3.44bn last year.
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Jan 22, 2008
Words:485
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