
Fitch Ratings reports on recycled deals dominating the private equity landscape in 2004
In the report, Fitch argues that the IPO exit route has not been particularly successful for European LBO issuers. While the market conditions for IPO issuance are currently more favourable than they have been for the last three to four years, and a number of Fitch-rated issuers have been contemplating IPOs, to date, there is still plenty of speculation but little execution. The trade sale exit route has proved to be more successful for Fitch-rated LBO issuers, with recent examples including the sale of Messer Griesheim's US, UK and German industrial gases business to Air Liquide, the sale of BSN Glasspack to Owen-Illinois and the divestiture of Oxoid to Fisher Scientific.
The rating agency concluded that recycled transactions remain the dominant exit route for private equity firms and that the popularity of recycling activity is a reflection of high levels of un-invested cash in the private equity sector. Fitch added that the market conditions are such that a lower equity contribution is accepted in recycled transactions, thereby facilitating a potentially enhanced internal rate of return for the private equity firms. Moreover, such transactions are quicker, easier and cheaper to arrange compared to flotations, and offer far less execution risk for the private equity firms.
Latest News
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme
Multi-family office has seen strong appetite, with investor base growing since 2016 to more than 90 family offices, Meiping Yap told Unquote
Permira to take Ergomed private for GBP 703m
Sponsor deploys Permira VIII to ride new wave of take-privates; Blackstone commits GBP 200m in financing for UK-based CRO
Partners Group to release IMs for Civica sale in mid-September
Sponsor acquired the public software group in July 2017 via the same-year vintage Partners Group Global Value 2017
Change of mind: Sponsors take to de-listing their own assets
EQT and Cinven seen as bellweather for funds to reassess options for listed assets trading underwater