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Preqin’s quarterly deal flow data shows a total of 515 private equity buyout deals announced in Q3 2010, with an aggregate value of $66.7bn. This represents a 29% increase in the aggregate value from Q2 2010, when 498 deals were announced with an aggregate value of $51.9bn, and a notable 147% increase on the 396 deals valued at $27bn reported in Q1 2010. Deal flow in Q3 2010 represents the strongest quarter for buyout deals in the post-financial crisis landscape.
Other key findings include:
- In Q3 2010, North American aggregate deal value increased 6.5% from the previous quarter, with 249 deals valued at $34.2 billion announced in Q3 2010, up from the 233 buyouts valued at $32bn in Q2 2010.
- Furthermore, Q3 2010 deal flow in North America represents a significant 165% increase on the aggregate deal value seen in the region in Q1 2010, and remains notably higher than deal flow witnessed in the region during 2009.
- European aggregate deal value increased significantly from the previous quarter, with 186 buyouts valued at $26.3bn announced during the quarter, a notable 120% increase from the $12bn in deal value witnessed during Q2 2010. Notable deals in the region include the take private of UK-based Tomkins plc by Onex Corporation and CPP Investment Board for $5bn, and the announced acquisition of Switzerland-based Sunrise Communications by CVC Capital Partners from PEbacked TDC A/S for CHF 3.3bn.
- While deal flow in Asia and Rest of World has seen a slight decrease from the previous quarter, it has continued to remain above the levels seen in the previous year, with 80 deals valued at $6.2bn announced in the region, a 62% increase from the $3.8bn reported a year earlier in Q3 2009.
- Almost half of all deals announced globally in Q3 2010 were leveraged buyouts, and such deals accounted for nearly twothirds of the aggregate deal value worldwide during the quarter.
- Growth capital investments accounted for 23% of all deals completed in Q3 2010, and add-on deals made up 20% of all private equity buyout-backed investments.
- Buyouts valued at over $1bn accounted for 60% of global aggregate deal value of deals in Q3 2010, and public-to-private deals accounted for 23%.
- 54% of all buyout deals globally in Q3 2010 were valued at less than $100mn.
- 2010 has seen a resurgence in secondary buyout deals in comparison to 2009, with 137 secondary buyouts valued at $41.4bn announced globally in 2010 to date, more than four times the value of secondary buyouts seen in 2009, which saw 70 secondary buyouts valued at $9.9bn.
- Buyout activity in Q3 2010 was highest in the industrials sector, with over a quarter of all buyout deals announced globally and over a fifth of the global aggregate value of buyouts attributed to deals in the sector.
- The largest deal of the quarter, and of the year, is the public-to-private acquisition of Tomkins plc by Onex Corporation and CPP Investment Board, in a deal valued at $5bn, which was both announced and closed during Q3 2010.
- During Q3 2010, 190 PE-backed exits occurred, with an exit transaction size of $56.7bn. This represents a 22% increase in aggregate exit value from the previous quarter, when 169 exits valued at $46.4bn took place. Exit activity during Q3 2010 represents the most active quarter for exits in the post-financial crisis landscape, with activity matching the levels of exit activity seen during the pre-financial crisis era.
Comment:
“Global private equity deal flow has witnessed a continued resurgence in Q3 2010, surpassing deal flow levels seen during the previous quarter, and therefore representing the strongest quarter for buyouts deals in the post-financial crisis era. In particular, this quarter has been notable for a surge in European deals, with European deal flow in Q3 2010 more than double that witnessed during the previous quarter. In addition, there has been a continued surge in secondary buyouts globally during Q3 2010, with $26.8bn of secondary buyouts announced during the quarter, and $41.1bn in the year to date – more than four times the value of secondary buyouts seen during the whole of 2009. The largest deal of the quarter was the public-to-private acquisition of Tomkins plc by Onex Corporation and CPP Investment Board, in a deal valued at $5bn, which was both announced and closed during Q3 2010 and is the largest private equity deal of 2010 to date.”Manuel Carvalho, Managing Analyst – Buyout Deals
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