The corporate team at law firm Cobbetts says it has advised on four private equity deals in five weeks, despite the reported dearth in activity in the West Midlands.
Cobbetts says its experiences show funding is still available for the right businesses, even though official figures show private equity largely disappearing over the last year.
Figures from the Centre for Management Buy-out Research (CMBOR) found that the value of private equity deals in the West Midlands for the six months to June 2009 was £132 million, a 74 per cent drop on the £500 million for the same period in 2008.
A separate study found that private equity houses had their steepest decline on record, with portfolio returns falling by 27.6 per cent in 2008 in the wake of the credit crisis.
But contrary to these figures, Cobbetts said it had seen a flurry of activity, advising the management team at mooring solutions specialist Viking Moorings in a deal which saw HSBC Private Equity acquire the business from Inflexion Private Equity.
Before this, Cobbetts advised the management team of Ansa Holdings and Independent Inspections Holdings in its private equity-backed MBO from listed parent company Mavinwood plc, and advised private equity house Key Capital Partners (KCP) in its backing of the MBO of TSC Foods. Most recently, the firm advised mid-market private equity firm Gresham Private Equity on the management buyout of five businesses from Formation Group, including James Grant, the talent management specialist.
The four deals, which were agreed between June 30 and July 30, had a cumulative value of £234 million, almost double the £132 million quoted in CMBOR’s West Midlands statistics for the entire first half of 2009.
Adrian Cutler, corporate partner at Cobbetts in Birmingham, said: “While private equity deals have been in decline, our experiences suggest that funding is available for quality businesses with strong balance sheets and steady growth.
“Irrespective of the recession, private equity houses have not closed their doors. They are, however, becoming increasingly selective to ensure banks will leverage deals.”