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Some £7.2 billion changed hands in the UK buy-out market between January and March, the highest total for a first quarter ever recorded. However, deal volume was slightly lower, with 158 buy-outs compared to 164 in the same period of last year, according to the Centre for Management Buy-out Research (CMBOR).

The data is broadly in line with a trend of rising total deal value and decreasing deal flow that has persisted since 2003. However, it is not clear how much deal activity was driven by vendors looking to escape April’s changes to capital gains tax (CGT), which saw the basic rate of CGT raised from ten to 18 per cent.

In the first quarter of 2008, buy-ins contributed more than four-fifths of the market value, amounting to £6 billion. This matched the pattern seen in the whole of 2007, when buy-ins (including management buy-ins and institutional buy-outs) totalled £35.2 billion, or 77 per cent of the entire market.

London contributed a record £21.4 billion to the buy-out and buy-in market in 2007, buoyed by the acquisition of pharmacist Alliance Boots by New York-based private equity firm KKR for £11.1 billion.

According to CMBOR, the global credit crisis ‘continues to weigh heavily on the UK buy-out market’. Nevertheless, in the first quarter of 2008 there were 15 buy-outs for more than £100 million, with a combined value of £5.9 billion, including that of waste collection company Biffa for £1.2 billion.

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