The number of high value buy-out deals in Wales doubled last year, as MBO activity has rebounded to pre-credit crunch levels, according to an analysis by Hugh James solicitors, the Top 100 law firm and PwC.
According to Hugh James and PwC, there were six buy-out deals with an enterprise value of more than £3million in Wales in 2014 – up from just three in 2013. The last time there was this number was in 2007 (see graph below). At the height of the recession in 2009 and 2010, no MBO deals of this size were recorded in Wales at all, with only one in 2011. Hugh James say that increased availability of funding and more attractive valuations are key factors behind this sharp rise, as banks and institutional investors’ appetite for backing MBOs grows too.
Gerallt Jones, partner at Hugh James, says: “Activity in the Welsh buy-out market has been largely stalled since the 2008 downturn. However, it now seems that we may have reached a tipping point. As the economy has recovered, both on a local and national level, there is a much greater sense of optimism.”