European private equity buyouts decrease

European private equity buyouts decreased at the start of 2012, according to the latest data published by the Centre for Management Buyout Research (CMBOR).

Meanwhile the UK has returned to dominance in the industry, accounting for nearly half of the total number and combined value of private equity-backed buyout deals in Europe in the first quarter.

The research, sponsored by Equistone Partners Europe and Ernst & Young recorded 139 European deals totalling €13bn completed over the period, against the same volume of deals (139) in Q4 2011, totalling €14bn, and 608 buyouts totalling €61.5bn for the whole of last year.

Christiian Marriott, director at Equistone Partners Europe said: “The European buyout market has had a cautious start to the year, reflecting ongoing uncertainty in the Eurozone. As a result, some recent investment and sale plans have been delayed or abandoned, impacting the volume of completions this quarter. However, it is encouraging to see that banks in Europe are now showing an appetite to lend again, with a strong pipeline of deals expected to complete over the next six months.”

The UK saw 62 deals with a total value of €6.3bn, accounting for 48% of the European total, the largest share of the buyout market held by a single country since Q3 2002. The next largest countries by value this quarter were Belgium, recording a total of €2bn deals and Switzerland recording €1.6bn, accounting for 15% and 13% of the total, respectively.

Sachin Date, EMEIA Private Equity Leader at Ernst & Young said: “Despite volatility in the Eurozone, we are starting to see the financing markets gradually relax. Debt has traditionally been fundamental to the private equity business model and deals done in Q1 on average included substantially more leverage than over the past couple of years. This said, private equity houses are increasingly looking to alternative sources of finance. The bond financing market is open and packages are being used more frequently than for some time.”


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