PE Dealmaking Highlights of 2010

I’m just coming up for air after finishing the annual PE deal-making wrap up/outlook story for Buyouts first issue of year, replete with the themes of the year that was, insights from industry execs and more Excel-sorted data than I care to stare at over the course of a lifetime. Below are a few highlights. Look for rest in the 1/3/11 issue of Buyouts.

*U.S. buyout shops closed approximately 745 deals around the world by Dec. 15, compared to 530 deals by the same time last year, according to Thomson Reuters. More interesting, though, was the fact that this year’s disclosed deal value was $77.3 billion, an increase of more than 50 percent from the $34.7 billion in disclosed deal value for the same period in 2010.

*After a tepid first half, deal activity spiked in the third quarter, with 279 deals announced with a disclosed value of $34.9 billion, compared to the relatively measly $3.6 billion of disclosed deal value in the second quarter.

*As my colleague Luisa Beltran pointed out, Carlyle was ubiquitous. The firm invested $7 billion over the course of the year in more than 50 investments around the world, compared to about $5.2 billion invested in 2009. It also sold 13 portfolio companies, brought six companies public, and distributed $7.5 billion to its limited partners—about 3x the amount of capital it distributed to its investors in 2009.

*Carlyle is fairly bullish on the economy. David Marchick, managing director and global head of external affairs, told Buyouts: “In part based on the data we see from 200-plus portfolio companies, we have a more optimistic view on the global economic outlook than what seems to be the consensus.”

*Executives at KKR are particularly excited about deals in energy, retail, consumer products and health care.

*Sponsor-to-sponsor deals accounted for approximately 11 percent of deals in 2010, according to Thomson Reuters, up from 4 percent last year. When restricted to the middle market, sponsor-to-sponsor deals were even more prevalent. By Dec. 8, they accounted for close to 45 percent of mid-market leveraged buyouts in the fourth quarter, according to Thomson Reuters LPC.

*As of Dec. 8, $3.3 billion of dividend recapitalizations of mid-market companies had closed, and another $3.9 billion were in the pipeline, according to Thomson Reuters LPC. By contrast, there were no mid-market dividend recaps in the market at that time in 2009. Further, mid-market dividend recap financings actually out-paced LBO financings in the fourth quarter, the first time that’s happened in five years, according to Thomson Reuters LPC.