Private equity firms are looking to the industrials sector again for new deals, a survey showed on Wednesday, as low price tags entice them back to a sector they gave a wide berth during the financial crisis.

More than a third of private equity executives expect to be active in the industrials sector over the next 12 months, up from 26% last quarter, according to a survey from accountancy firm Grant Thornton, which quizzed more than 100 UK-based private equity insiders.

Demand for industrial deals, historically one of the most popular segments for private equity, dried up in the wake of the credit crunch, as firms focused on less cyclical industries.

But buyout firms are eyeing the sector once more, targeting businesses that have weathered the downturn well. A number of rival private equity firms are circling Spanish food-can maker Mivisa, owned by buyout house CVC.

Despite increased competition for assets, executives expect deal multiples to be low, the survey said. They expect to pay 5.9 times earnings before interest, tax, depreciation and amortization (EBITDA) for companies, the second lowest of any of their main sectors.
That compares to the 5.6 times earnings they expected to pay at the end of the second quarter.

"An increasing number of private equity firms seem to think that the low price tag on industrial targets outweighs their capex requirements," Merali said.

Though industrials are back on the radar again, healthcare tops the list, with 47% of respondents expecting it to be an important sector for new deals, while 43% said business support services would be a core area.