Billion-pound merger and acquisition (M&A) deals involving private equity have dried up but the market is in 'surprisingly good health', according to corporate finance advisory firm Hawkpoint.


This year, only one M&A deal has topped £1 billion, with most falling under the £150 million mark, Graham Paton, managing director at Hawkpoint, said at a Commerce and Industry Group seminar last week.



Predicting a shift towards increased private equity activity in the manufacturing and technology sectors over the coming months, Paton said: 'The market is in surprisingly good health.'



He added: 'Most of the mid-market private equity firms in London are very well capitalised, and are looking to buy in the downturn. They can buy businesses at considerably lower levels than last year.'



Paton said banks were also keen to continue financing deals, but added: 'Our biggest concern is that the supply of vendors has dried up.'



Paton said uncertainties in the market had caused most private equity firms to sell off their assets last year while prices remained high.



'That lack of stability has made things a bit slower than expected', he said, adding that private equity firms were now casting their gaze towards company subsidiaries, while simultaneously building their contact bases with company management teams.



James Dean