Buyout review focus - Value of buyouts plunges to five year low

01 January 2009

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According to the latest statistics to be published in the 20th edition of the European Buyout Review, total buyout volume and value have dropped dramatically in 2008. Although this is hardly surprising given the deteriorating macroeconomic environment over the past year, with major banking collapses and government bailouts, the extent of the drop still makes for sombre reading. European deal activity is down by 30% to 572 recorded transactions worth approximately EUR73bn, which is a staggering 60% fall from the levels seen in both 2007 and 2006, and one has to go back to the post-9/11 nadir of 2003 to see a lower annual total.

The main European private equity markets (UK, France and Germany) saw a similarly dramatic fall in total value figures as the mega-deals that one had become accustomed to in the past few years remained conspicuous by their absence. Unexpectedly, it is the Italian buyout market that offers a rare ray of light at the end of what is a long and gloomy tunnel. Despite the country's poor economic outlook, the private equity market has come of age in the region and buyout activity rose for the fifth consecutive year - in 2008 by a remarkable 48% - while the total value of buyouts further increased by 13% to EUR9.1bn.