Volume and value of European transactions falls

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The number of European private equity deals dropped by 21% to 322 in the first quarter of 2008 compared with the 409 deals reported in the final quarter of last year as the credit crunch continues to bite, according to the unquote" Private Equity Barometer in association with Candover.

The total value of private equity transactions in Europe fell for the third consecutive quarter to just EUR21bn, down from 34% from EUR31bn in Q4 2007, and down 63% from EUR56bn reported in Q1 2007. The 137 buyouts completed in the first quarter of 2008 was the lowest since 2004 and 33% lower than the 204 buyouts reported in Q4 2007. Only three completed deals were valued at more than EUR1bn: the EUR1.7bn buyout of UK-based Biffa led by Montagu Private Equity, the EUR1.5bn buyout of Techem AG in Germany and the EUR1.4bn buyout of Emap's B2B division in the UK by Apax Partners.

Even if the credit crisis has hit the hardest in the UK, the region continues to maintain its position as the largest market, both in terms of volume and value. In total, 11 of the 20 largest European and equity-backed transactions occurred in the UK, although, perhaps surprisingly, the value of transactions fell just 7% to EUR9.3bn compared to Q4 2007. All other European regions experienced a more pronounced fall. Only the Nordic region, where the credit crisis effects are known to be milder, recorded an increase in volume, up from 12 to 20 deals, although the total value of buyouts in the region fell 26% to EUR1.9bn, underscoring the decline in larger transactions.