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Mid-market deals rise to pounds 34m in the North-East.

Byline: By Guy Anderson

Deal activity in the middle market picked up during the second quarter of the year, with transactions worth pounds 34m completed in the North-East alone.

And nationally 29 deals worth an average of pounds 170m each were completed in the three months to June.

It was the strongest performance in the sub-pounds 250m middle market since the third quarter of 2000, according to corporate finance house KPMG.

Rod Wilkinson, director with KPMG Corporate Finance in Newcastle, said: "The market is well up on a like for like basis over last year and the underlying trend is one of robust performance.

"However, there is certainly no sign of the market overheating as buyers remain firmly focused on seeking the quality deals. This is reflected by the comparatively long time transactions are taking to convert to completion."

The total value of deals in the North-East was bolstered by the pounds 19m management buyout of transport company Hargreaves.

Newcastle United honorary president Bob Young sold the company ( which specialises in bulk freight such as council waste and carbon minerals ( to a senior management team.

He built up the company from a pounds 5m turnover operation with 20 trucks in 1994 into a pounds 62m turnover outfit with 300 trucks before the MBO.

Mr Wilkinson said: "It is very encouraging to see the UK mid-market in such a liquid and healthy state. The overall sentiment is one of stability, where solid, well run companies with attractive growth prospects are finding strong demand from a ready supply of well capitalised private equity buyers. Encouragingly, the current level of activity appears to be sustainable."

Nationally, the quarter saw three large deals worth more than pounds 250m each, including the public to private deal which saw fashion chain New Look bought for pounds 699m.

Founder Tom Singh, who set up the company in 1969, sealed the takeover in April.

New Look is the UK's third largest womenswear retailer with more than 500 outlets and a further 191 sites in France. It employs around 10,000 people and generated sales of pounds 643m in its last financial year.

Mr Wilkinson said: "Public to private deals continue to provide some of the largest deals in the market. The two largest deals this quarter, Chelsfield and New Look Group were both public to private. Private equity houses are continuing to scour the public markets for value opportunities."
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Copyright 2004 Gale, Cengage Learning. All rights reserved.

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Publication:The Journal (Newcastle, England)
Date:Jul 21, 2004
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