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West Midlands buyout market ends year on a high; Busy year for deals as region records highest number of management buyouts since 2011.

Byline: Tamlyn Jones

The West Midlands has seen the highest number of management buyout deals since 2011 - and the highest average deal value since 2007.

There were 22 deals in 2017 in the region, up from 14 in 2016, with the average value tripling on that of 2016, up from [pounds sterling]36.9 million last year to [pounds sterling]119.5 million in 2017.

The total value at [pounds sterling]2.6 billion is the third highest since records began in 1985 although this was skewed somewhat by one large transaction worth nearly [pounds sterling]2 billion.

The preliminary figures are based on data published by the CMBOR at Imperial College Business School, sponsored by Equistone Partners Europe and Investec Specialist Bank.

The research reveals there were 16 buy-ins and six buyouts - reflecting a trend set since 2005 where the number of buy-ins has consistently exceeded the number of buyouts.

High-profile deals in the West Midlands included the acquisition of Punch Taverns by Patron Capital in a deal valued at [pounds sterling]1.8 billion, the purchase of Kidderminster-based Brintons Carpets by Argand Partners and Equistone Partners Europe's majority investment in Birmingham-based technology-ledmarketing company Inspired Thinking Group.

Manufacturing once again dominated the field with eight deals in 2017, up from six in 2016, followed by four deals in technology, media and telecommunications and three in business and support services.

Reflecting the Punch Taverns transaction, leisure had the highest sector value with manufacturing coming in second at nearly [pounds sterling]500 million.

The West Midlands saw a small decline in the number of exits from 17 in 2016 to 14 in 2017.

Secondary buy-outs were the most popular exit route with nine deals recorded in 2017 but trade sales were down from nine in 2016 to four in 2017.

Nationally, there were 181 deals recorded in 2017, down from 188 in 2016, but with deal values nearly doubling from [pounds sterling]11.8 billion to [pounds sterling]23.8 billion in 2017.

Average deal sizes were up at [pounds sterling]131.5 million, back to their 2007 peak, and the second half of 2017 was particularly strong.

Phil Griesbach, partner at Equistone Partners Europe's Birmingham office, said: "The Midlands has had an excellent year and, while it was dominated by a single deal approaching [pounds sterling]2 billion, the core market up to [pounds sterling]100 million was particularly buoyant, with 19 of the 22 deals in that bracket.

"We have had a busy time since the summer and expect 2018 to pick up where 2017 ended, with a good number of quality businesses expected to come to the market."

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Title Annotation:Business
Publication:Birmingham Post (Birmingham, England)
Date:Jan 4, 2018
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