UK M&A activity in the leisure sector was subdued in the first half of 2008 with both deal volume and value down on the year, according to a study by PKF. The PKF report, Deal Drivers UK, produced in association with mergermarket found that although growth was seen in the wider leisure sector and room rate and occupancy figures remain steady for hoteliers across the UK, M&A activity in the sector was 90% down in value terms and 25% in volume terms compared to the first half of 2007. In terms of the first half figures, the larger share of transactions occurred in the first quarter – 23 transactions worth £806m – while in the second quarter there were 17 transactions worth £179m. The largest deal completed in the first half was the £345m management buyout of Pret a Manger, backed by Bridgepoint Capital, the UK private equity firm There were a number of private equity buyouts in the first half. In March, Yo! Sushi was acquired in a £51m MBO supported by Quilvest, the Luxembourg private equity firm from its UK counterpart Primary Capital and in January, two London restaurants, Hakkasan and Yauatcha, were purchased through a £31m MBO by Tasameem, the Bahrainian property fund of Abu Dhabi Investment Authority, the UAE sovereign wealth fund. The budget end of the spectrum was fairly active and represented 50% of all the hotel sector transactions announced in the first half of the year. The largest of these was the acquisition of Pontin’s Limited, the UK operator of holiday camps and centres, for £46m by a private investor-led consortium. Robert Barnard, partner for hotel consultancy services at PKF, said: “Although M&A activity in the hotel and leisure sector was subdued in the first half, the sector as a whole has had a steady start to the year. Indeed, hoteliers across the country are holding their own and still maintaining healthy occupancy and room rate figures. “A recent CBI report has also stated that the travel sub-space is the only consumer services focused sector to report growth in business volume over the past three months. “Looking forward there are M&A prospects in the sector for the rest of the year with murmurings that the UK gaming group, 888, is the target of both its UK competitors, Ladbrokes and Partygaming.”