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PRIVATE EQUITY OUTLOOK
CATAPULT VENTURE MANAGERS
ON THE PROSPECTS FOR BUY-OUTS
ROB CARROLL
Managing director
Catapult Venture Managers
0116 238 8200
07976 226252
rob@catapult-vm.co.uk
www.catapult-vm.co.uk
C
atapult Venture Managers identify and invest in well-run businesses. not doing deals at the moment. However,
completed 27 deals last year and “Catapult is able to provide equity overall this situation is, of course, not
bucked the downward trend in the funding of up to £2 million and make helpful and will be damaging if it is not
marketplace. This relative buoyancy has available both the financial and professional resolved quickly.
spilled over into 2009 with Catapult support to help accelerate the speed at Sectors that are less affected by recession,
investing in Comply-Serve as part of an which businesses reach the next stage of and therefore currently more attractive
£800,000 funding round. The company is a development,” he said. investment propositions, include
software-as-a-service business delivering a
unique web-based project compliance
system to the rail infrastructure sector.
“Deal activity at the upper end of the market virtually came
Rob Carroll, managing director of
Catapult, said, “We are delighted to have
to a standstill in 2008. Such transactions generally require
started the year well, but no one is under
a relatively small amount of private equity, but require a
the illusion that this year is going to be a
particularly easy one.
significant level of debt funding”
“Deal activity at the upper end of the
market virtually came to a standstill in
2008. Such transactions generally require a Carroll believes that predicting when the healthcare, medical devices and
relatively small amount of private equity, tide will turn and the economy will start to environmental and support services.
but require a significant level of debt improve is very difficult: “Towards the end of “With the current lack of confidence
funding. With banks pulling away from last year, I thought the economy would across the UK economy, most MBOs now
lending, this has significantly reduced bottom around the end of 2009. I still believe need an element of private equity, but debt
activity in this arena.” that is likely to be the case, but it’s now really funding from the banks is proving difficult
And it’s not just the banks shying away a question of how long we will stay there to find,” said Carroll. “This will only start to
from investment. Private investors are also before we start to see a gradual improvement. happen when we return to more normal
turning their backs – wanting to find a safer My best guess is mid-2010. economic conditions.
haven for their money. “However, there is still a substantial bank “Catapult’s strong deal flow and
“Debt is no longer ‘cheap’ and it’s of private equity money available for the completion levels show that we continue
frequently unavailable – whatever the cost,” right business opportunities. We are still to invest in this difficult period as there are
said Carroll. “However, at the smaller end of open for business and being approached by still attractive deals to be done. Delivery
the deals market, there are still deals to be increasing numbers of enterprises looking is the key buzzword in the market at the
done. We believe our flexibility and approach for funding. In one sense we are benefiting minute, and delivering is exactly what we
to dealmaking will enable us to continue to from the situation with the banks generally are doing,” he concluded. ■
38 Mergers & Acquisitions
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