Autumn renaissance

01 November 2008

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The leaves are falling; it's getting cold and dark and so is the Q3 unquote barometer. It shows European private equity has dropped almost 10% in deal volume and more importantly 35% in deal value to the lowest level since Q1 2004. The French market however has bucked the gloomy trends this month by recording its largest deal flow this year with small and mid-cap buyouts and expansion deals particularly prominent. Abenex Capital led the way on the buyout side and rounded up the Buffalo Grill deal this month, with the EUR300-350m purchase of the restaurant chain from Colony and Eurazeo being the biggest buyout deal. It was followed by Duke Street Capital who completed their EUR217m purchase of biotech company Groupe Biomnis

The crown for the biggest deal however goes to L Capital who recorded an important exit with the sale of computer games retailer Micromania. The company was purchased by Texas-based GameSpot for EUR480m, making the US firm the largest distributor of games in France where it had no presence before.

On the fundraising front Charterhouse held the first close of its ninth buyout fund on EUR3.6bn. The fund, Charterhouse Capital Partners IX, has a EUR6bn target and plans to hold additional closings over the next several months. With Pechel closing its third fund on EUR165m this month, exceeding its EUR150m target, and Bridgepoint, who exited Pisto this month, about to close its fund on EUR4.8bn, ahead of its EUR4bn target, it seems the funding faucets are yet to close.

The high volume of deals this month may well be an effect of the summer holiday but with Bridgepoint Capital reportedly interested in casinos and CDC closing in on Socotech there is hope that this isn't a freak month and that there will be a continued increase in activity for the remainder of 2008.

Yours sincerely,

Francois Rowell

Editor, France unquote"

Tel: +44 20 7004 7524

francois.rowell@incisivemedia.com.