Financial buyers may be cautious in the current uncertain credit markets but deals are still being done. Today, US-based private equity house Clayton, Dubilier and Rice acquired the industrial testing division of UK-based mid-cap engineer Bodycote.

Clayton, Dubilier and Rice was prepared to pay £417 million or 20 times the £21 million profits the business made last year. The resilient nature of the activities that Bodycote's testing division undergoes doubtlessly made it an attractive asset to sell.

Clayton, Dubilier & Rice chief executive Donald Gogel commented: “[Bodycote]… exhibits the key characteristics that we look for in all of our investments, namely a market leading services business with customers in diversified and resilient industries.”

However, whilst companies such as Bodycote look likely to find a buyer whatever the economic situation, others are finding the current funding climate weakening their dealmaking, as the drawn out and, in cases, inconclusive, auctions of Reed Business and Informa have shown.

Overall though, private equity companies remain reasonably positive. Candover Investments chairman Gerry Grimstone commented: “Although no company can be immune from the economic pressures facing Europe, our portfolio is in good shape, and we continue to believe that this is a good time to invest with company valuations and debt multiples back to more sensible levels. Realisations, however, will be harder to achieve.”