Buyouts decrease as expansion deals soldier on

While buyouts far outstripped expansion deals in the Benelux countries over the boom years, the lack of leverage has finally taken its toll on the market. According to data collected by unquote", the LBO rut set in during 2008, with buyouts recording a 40% drop. In contrast the number of expansion deals actually showed moderate growth year-on-year (see chart).

2009 figures gathered so far show a continuation of this trend with the region seeing only two buyouts. As debt issues persist and the majority of buyout houses concentrate on adding value or restructuring their current portfolio, this could well be a trend that is likely to develop over the coming year.

The negative correlation between expansion and buyouts has continued in the first quarter of 2009, with 11 growth stage deals completed so far this year. Indeed, in this issue of Benelux unquote" alone, there have been three sizeable expansion deals.

Gimv completed a EUR75m investment in food company Vandemoortele Group, taking a minority stake in the business. The deal is the first investment from the firm's EUR500m XL fund (page 25).

Meanwhile, Waterland Private Equity completed a couple of expansion investments totalling EUR86m. The investments were in two energy companies across two countries: the EUR50m funding round for Belgian renewable energy developer Enfinity; and the EUR36m investment into BioMCN, a dutch alternative fuel manufacturer (pages 26-27). The latter was a co-investment alongside Econcern, an energy company that itself received a EUR300m investment from Rabo Ventures, Delta Lloyd and SHV (June 2008, page 21).

Other investments include a EUR7m funding round led by ePlanet Venture and Prime Technology Ventures for Dutch greeting card business Greetz; and a EUR1.5m investment by KBC Private Equity and Arkimedes into data centre LCL Belgium.

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