The potential buyout of a £145m (€215.3m) UK software provider has fallen apart due to "uncertainty in the debt market" in the second sign this week that the credit crunch has filtered down to middle market deals.

In a statement to the London Stock Exchange, the board of software company Civica said an offer from a buyout firm, widely believed to be UK firm Alchemy Partners, did not progress because of "uncertainty in the debt market". Civica currently has a market capitalisation of about £145m (€215.3m).