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Private deals gain traction

APPETITE for private equity backed deals increased during the second quarter, with a 38 per cent increase in the value of deals compared to the first quarter.<br /><br />According to the Candover Unquote Private Equity Barometer, published yesterday, the number of European private equity transactions rose to &euro;4.8bn (&pound;4.1bn) in the period, compared to &euro;3.5bn in the first quarter. Deal volumes remained similar, up seven per cent at 230.<br /><br />&ldquo;The most important reason for the pick-up in activity has been a sharp rise in the number of stressed or distressed opportunities coming to market,&rdquo; the survey said.<br /><br />The biggest acquisition in the period was Charterhouse Capital&rsquo;s purchase of Wood Mackenzie Consultants from Candover for about &euro;637m including debt.<br /><br />But the value of investments was still down 85 per cent on the first six months of 2008, and volumes are down 42 per cent. <br /><br />Total buyout value of&nbsp; &euro;6bn in the six-month period was down 87 per cent year-on-year, with volumes down 70 per cent at 56 deals. <br /><br />&ldquo;While it is encouraging to see some growth in volumes and values compared to the first quarter, the market for buyouts remains extremely tough,&rdquo; said Candover Partners&rsquo; chairman Marek Gumienny.<br /><br />&ldquo;However, transactions are not impossible. The sale of Wood Mackenzie shows that buyouts are achievable for high quality assets with strong management teams and good growth prospects.&rdquo;