• Home
  •  
    Regions
    • Europe
    • UK & Ireland
    • DACH
    • Nordic
    • France
    • Southern Europe
    • Benelux
    • CEE
    • Asia
  •  
    Deals
    • Buyouts
    • Venture
    • Exits
    • Refinancings
    • Build-up
    • Turnaround
    • Secondaries
    • Advanced deals search
  •  
    Funds
    • Buyout
    • Venture
    • Mezzanine
    • Debt
    • Funds-of-funds
    • Secondaries
    • Fundraising pipelines
    • Advanced funds search
  •  
    GPs & LPs
    • GP profiles
    • LP profiles
    • GP news
    • LP news
    • Sponsors search
    • LPs search
  •  
    Secondaries
    • Deals
    • Funds
    • News
    • Analysis
  •  
    People
    • People moves
    • Analysis
    • In Profile
    • Q&A
    • Videos
    • Comment
  •  
    Analysis
    • In Profile
    • Fundraising
    • Q&A
    • Comment
    • Videos
    • Podcast
    • Reports
    • Data Snapshots
  •  
    Unquote Data
    • Deals search
    • Exits search
    • Funds search
    • Sponsors search
    • Advisers search
    • LPs search
    • League tables
    • Reports
  • Sign in
  • Sign in
    • You are currently accessing unquote.com via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0)203 741 1137

      Email: Georgina.Lawson@acuris.com

      • Sign in
     
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
  • Follow us
    • Twitter
    • LinkedIn
  • Free Trial
  • Subscribe
Unquote
Unquote
  • Home
  • Regions
  • Deals
  • Funds
  • GPs & LPs
  • Secondaries
  • People
  • Analysis
  • Unquote Data
  • You are currently accessing unquote.com via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0)203 741 1137

    Email: Georgina.Lawson@acuris.com

    • Sign in
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
Unquote
  • Buyouts

Buyout focus - Southern European sunshine

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  

As Europe licks its fresh wounds, Italy and Portugal are making hey, but can the sunshine last in Southern Europe or will the storm clouds from the rest of Europe blow in? By Francinia Protti-Alvarez

Last year was dire for the European buyout market. Q4 figures were officially the lowest for a decade, with deal value sliding 59% against the preceding three months to just over EUR8bn - the lowest quarterly total since Q2 1997. The UK - once Europe's mighty buyout powerhouse - fell to its knees: during December the largest buyout was a paltry £20m.

Southern Europe, however, was conspicuous by its strong performance. In fact, Italy recorded an increase in deal activity and value, even as every other country saw both plummet; most by around 50% (see chart).

But Italy is in buoyant company in the region - in the fourth quarter of last year Portugal was home to the EUR1.2bn buyout of renewable energy utility Enersis. The deal was not only noteworthy for its size but for its sector: it marks Europe's largest private equity-backed takeover of a wind farm. Perhaps most impressive, it managed to attract four blue-chip lenders: BBVA, Banco Espirito Santo, Caixa Geral and Banco Comercial Portugues.

"The strong local network of the Southern European buyout market is tightly interwoven and has strong ties to the banking sector - which itself has been less affected by the economic downturn - and this helped the region to maintain and even pick up pace in 2008," suggests Emanuel Eftimiu, European research manager at unquote".

The buyout was backed by Iberia's new kid on the block, Magnum Industrial Partners, set up in November 2007 by Santander's Angel Corcostegui and Baldomero Falcones, formerly of Mastercard International. The fund closed on EUR866m, comfortably surpassing its EUR800m target.

This investment vehicle has been active since inception, closing its fifth deal last month when it backed the MBO of Portuguese pharmaceutical chain Generis. The deal was structured roughly 50/50 debt-to-equity split, commonplace in today's leverage-lite backdrop, with debt provided by Banco Espirito Santo Investment, Banif, Caixa Peral de Depositos and Banco Santander. More noteworthy, however, is what appears to be a hefty price tag: the EUR208m enterprise value represents more than 10x the company's EUR20m Ebitda.

Top of the (asset) class

Despite the region's apparent decoupling from the rest of Europe vis-a-vis deal activity, there are similarities; namely a fascination with infrastructure. Indeed, the Enersis mega deal was one of many recent disposals by beleaguered Australian infrastructure fund Babcock & Brown. Private equity firms are also eyeing up two parking lots in Spain. Bridgepoint is said to be looking at Ferrovial's Cintra, in a deal that could value the business at EUR500m. Separately, newcomer ProA is said to be interested in Acciona's parking lot, valued at around EUR200m.

Infrastructure appears to be in everyone's good books, with fundraising reflecting this trend. Santander continues to raise its EUR1.5bn infrastructure fund - although neither a date nor a target for a first closing has been set, while it had to suspend the fundraising for its fund-of-funds in September last year due to a lack of LP appetite. Australian financial services group Macquarie is also believed to be raising two new funds, Macquarie Infrastructure Partners II ($6bn) and Macquarie European Infrastructure Partners III (EUR5bn).

Meanwhile, global private equity giants are increasingly making forays into the space: Blackstone Group is in pre-marketing for a $3-5bn infrastructure fund (just two months after abandoning plans for a $5bn Indian infrastructure vehicle); and KKR is reportedly raising anywhere from $5-10bn, having announced its move into infrastructure last May.

Yet, when it comes to infrastructure, it cannot all be put in one bag. "Banks are differentiating between renewable energy-related infrastructure and the disposal by large construction company's of non-core assets," says Neil Collen, partner at Livingstone Partners' Spain office. "Project financing for renewable energy assets is less difficult to obtain as it contains little risk - national utilities providers must acquire the energy at above market rates. The same cannot be said of other type of infrastructure."

Moreover, infrastructure alone is not going to be enough to see buyout activity in Southern Europe maintain a healthy flow. "Between the credit crunch and the recession, difficulties in finding comparables for valuations, and the time these are taking to carry out, the number of new PE-backed acquisitions - or even add-ons - will be low," observes Eugenio Morpurgo, CEO of Italian corporate finance advisory Fineurop Soditic.

Already, YTD figures for Q1 2009 show private equity activity has experienced a considerable drop from Q4 2008, which (in contrast to the full-year figures) was already slow. "Activity will be scarce: 2009 looks like a year for re-capitalisations and rescue finance," Morpurgo adds.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  
  • Topics
  • Buyouts
  • Southern Europe
  • Infrastructure
  • Industrials

More on Buyouts

Clinical trials and biotechnology
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

  • Buyouts
  • 04 September 2023
EMEA Public to Private M&A
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

  • Investments
  • 04 September 2023
HR software solutions providers
Main Capital’s Assessio to be sold to Pollen Street

Recruitment software company tripled in revenue under Main Capital’s ownership

  • Buyouts
  • 25 August 2023
Ice cream
Exponent divests ‘significant' stake in Meadow to Canadian investor

Since 2018, GP has diversified food ingredients company's focus beyond commodity dairy

  • Exits
  • 22 August 2023

Latest News

Fund closes in US dollars
  • Funds
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

  • 05 September 2023
Clinical trials and biotechnology
  • Buyouts
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

  • 04 September 2023
Public sector software
  • Exits
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

  • 04 September 2023
EMEA Public to Private M&A
  • Investments
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

  • 04 September 2023
Back to Top
  • About Unquote
  • Advertise
  • Contacts
  • About Acuris
  • Terms of Use
  • Privacy Policy
  • Group Disclaimer
  • Twitter
  • LinkedIn

© Merger Market

© Mergermarket Limited, 10 Queen Street Place, London EC4R 1BE - Company registration number 03879547

Digital publisher of the year 2010 & 2013

Digital publisher of the year 2010 & 2013