European Buyout Market in 2011: A Slideshow of Highlights

The European buyout market reached 59 billion euros ($78.01 billion) in 2011, a 6.5% increase from €55.3 billion in 2010, according to the latest data published by the Centre for Management Buyout Research (CMBOR), sponsored by Ernst & Young and Equistone Partners Europe (previously Barclays Private Equity).

The data, compiled by CMBOR and covering private equity buyout activity across 15 European countries, reveals France challenging the UK as the historic European leader and topping the table of European buyouts in 2011, reaching €14 billion in 129 deals, compared to €7.9 billion in 118 deals in 2010.
Sachin Date, Europe, Middle East, India and Africa private equity leader at Ernst & Young says of the coming year for European buyouts: “Whilst the pipeline in the first six months of 2012 is encouraging, a lot will depend on the unfolding European sovereign debt crisis. The key will lie in how innovative dealmakers can be in finding the finance to fund the deals.”

Scroll down the slideshow to see CMBOR’s highlights of the 2011 European buyout market.


[slide title=”France Takes the Lead”]

French buyouts rose in 2011 reaching €14 billion in 129 deals, compared to €7.9 billion in 118 deals in 2010. The landmark French deal boosting figures was the acquisition by AXA Private Equity, Caisse de Depot et Placement du Quebec and Clayton Dubilier & Rice to acquire SPIE, a French industrial firm, from PAI Partners for €2.1 billion.

[slide title=”Germany Underperforms”]

Buyouts rose by 17% in 2011, reaching total value of €6.7 billion, compared to €5.7 billion in 2010. Germany completed 75 deals (62 in 2010). Compared to the size of its economy; this reflects an underperformance in the German buyout market, writes CMBOR.

[slide title=”UK Leads by Volume”]

In 2010 buyout value rose to €21.9 billion but the market in 2011 has plummeted to €13.9 billion, according to CMBOR. Despite the decline in deal value, the UK remained the largest country by volume with 180 buyouts.

[slide title=”Sweden Scoops Mega Deals”]

The Swedes took three out of the four largest deals of last year: Bain and Hellman & Friedman’s acquisition of Securitas Direct (€2.3 billion), Com Hem’s purchase by BC Partners (€1.9 billion) and Dometic’s acquisition by Nordic Capital (€1.4 billion).

[slide title=”Secondary Buyouts: Deal of Choice”]

Secondary buyouts accounted for six of the top ten deals, and often involved auctions, writes CMBOR. Secondary buyout transactions increased from 115 in 2010 to 165 in 2011 and contributed the bulk of the European buyout value at €28.8 billion (€26.4 billion in 2010).

But CMBOR cites trade sale as a more lucrative route as this type of transaction returned more than €48.4 billion to investors, almost twice the €26.2 billion returned through secondary buyouts.

[slide title=”Manufacturing is preferred sector”]

CMBOR records 75 manufacturing sector transactions in 2011, accounting for 30% of all European deals by volume. By value, these accounted for 21.7% of all European deals at €12.6 billion. This compares to 24% of deals in 2010 totaling €13.3 billion.

[slide title=”Debt levels rise for large buyouts”]

The average amount of debt in buyout financing for all buyouts equals 2010 figures with 31%, according to CMBOR. For European deals above €100 million average debt rose from 37% in 2010 to 47% in 2011.
CMBOR records high levels of equity to structure buyouts. Figures for all buyouts show 65% of equity employed in 2011 but deals over €100 million are at 49%.

[slide title=”Exits strong in 2011″]

CMBOR records exit value up to €76 billion, underscoring the need for PE investors to clear a backlog of investments from pre- 2008, states the report.

In 2011 there were five IPOs, compared to 14 flotations completed in 2010.

The largest European exit in 2011 was Nycomed at €9.6 billion. Skype was another large trade sale at €4.6 billion.

Trade sales reached 124 in 2010 compared with 154 in 2011.

Failures of buyouts reached a high of 92 in 2009 from 64 in 2008. In 2011 there were 50 creditor exits.

Source: CMBOR

Note: The 15 countries included in the research are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the UK.