Q2 figures buck downward trend

Francois Rowell
01 September 2009

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The unquote" Q2 2009 Private Equity Barometer, produced in association with Candover, has offered encouraging figures which support the theory that the worst of the downturn is over. The data indicates that Q2 figures have seen a gradual recovery in the markets over the last three months - the first such uptick for a year. Deal value rose by an impressive 38% to EUR4.8bn, with volume fairly flat. While the figures show a certain steadying of the market, it is important to emphasise how deep the market has plunged over the past year: Compared to the first half of 2008, activity is down by 42% and value by an astounding 85%.

The recovery highlights the improved availability of financing for buyout transactions. The data shows a 22% increase in deal volume to 56 transactions while value almost doubled to EUR3.6bn. However, although this marks the end of a year-long negative trend, it should be noted that these figures are significantly below the poor numbers recorded in the final quarter of 2008, while the year-to-date numbers are also just a fraction of those recorded last year.

Although deals with a value of more than EUR1bn remained expectantly absent, Q2 was marked with a resurgence of buyouts valued at EUR100m+, numbering a total 11 deals compared to six in Q1. The EUR640m secondary buyout of Candover-backed energy consultancy Wood Mackenzie, the largest deal recorded so far in 2009, accounted for nearly a quarter of the total. By contrast, the small-cap market, which includes deals valued under EUR100m, was also up over the three months, with activity rising 12.5% from 40 deals to 45, while value jumped 25% from EUR940m to a shade under EUR1.2bn.

The Benelux market proved to be exemplary in demonstrating the increase in value. While the deal volume stayed the same as in Q1 with five deals completed, the value nearly increased five-fold from EUR107m to EUR492m. The figures accentuate the fact that buyouts completed in the Benelux region, such as the EUR110m Bol.com acquisition by Cyrte Investments, were indeed of a larger calibre in Q2 than the previous quarter. Does this mean that debt is available in the Benelux region to complete larger LBOs? Unfortunately, growth over a single quarter does not offer us a solid trend yet, but it does offer the Benelux market a degree of optimism for the remainder of the year.