Buyouts are making a comeback

THE buyout market is on the turn. After two years of heavy falls the value of deals completed so far this year has reached £14.5bn in what market commentators say is the clearest sign yet that the market has reached rock bottom.

Mark Pacitti, at Deloitte & Touche which co-sponsors data on the buyout market with Barclays Private Equity, said: 'After years of steady growth in the 1990s, the buy- out market dropped 19% in 2001 and 21% in 2002.

'The levelling of the market gives the clearest evidence for two years that we have reached the bottom.'

Although the 2003 amount is so far less than that achieved in 2002, the final total is expected to equal or better the £15.3bn last year.

There are a number of large deals in the pipeline including Weetabix and Inmarsat, however Tom Lamb at Barclays says it is mid-market deals that are shoring up the whole market.

'The 2003 figures have been skewed by two mega-deals - the £2.5m buy-out of the Scottish & Newcastle pub estate and the £1.7bn delisting of Debenhams,' he said.

'Remove these and the market is extremely fragile. The overall market continues to be propped up by the mid-market - especially the £25m to £100m range which has grown by over 20% this year.'

The year has also been characterised by delistings, which accounted for over a quarter of the buyout market, and public-to-private transactions, which rose from 22 in 2002 to 35 this year.