2007 Review: The year in perspective

01 January 2008

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Although unquote's proprietary database Private Equity Insight displays a clear activity peak during the summer of 2007, the year saw a good start for the private equity industry. 2007 began with Doughty Hanson's EUR600m buyout of transport group Avanza, its first in Spain, followed by the February acquisition of Parques Reunidos. Led by Candover, the secondary buyout involving Advent International surpassed the EUR900m mark.

However, the summer period was the hottest of the year, in terms of deal activity as well as by value. The statistics show that those three months were the busiest for Italian and Iberian players, with total investment value soaring in July. That month, The Carlyle Group closed the EUR1.5bn acquisition of vehicle inspection group Applus+, the largest in Spain since the EUR4.3bn Amadeus buyout in 2005. Also in Spain, July also saw the acquisition of healthcare operator USP Hospitales in a deal with an enterprise value of EUR675m. The secondary buyout, involving Mercapital and Cinven, reportedly faced difficulties related to the debt syndication, as the deal was closed amid the summer's debt woes.

Just as in the rest of Europe, the industry lost its momentum in the following months, picking up again later in the year, with deals such as the SBO of gardening business GGP led by ABN AMRO Capital. The business was sold in October to 3i for an enterprise value of EUR736m. The sellers made a reported IRR of approximately 20-25% and a multiple of around 2x. Elsewhere, Spanish firm Capital Alianza closed the purchase of specialty chemicals Iberchem from Espiga Capital and Baring Private Equity Partners, in a deal that provided Espiga Capital with a money multiple surpassing 3x.

A selection of 2007 highlights

Portugal

March/April

- The Riverside Company buys telecom operator ONI for EUR160m, in one of the largest Portuguese deals of the year.

May

- Portugal's GP Explorer sells audiovisual business Grupo Alfasom to Spain's Quercus Equity generating a return of 4.54x with an IRR of 138% for Explorer after a holding period of 20 months.

September

- Portuguese GP Inter-Risco makes a 2.8x return with the exit of semiconductor manufacturer Chipidea.

Spain

January

- N+1 refinances the debt of cosmetics business Bodybell and makes an IRR of 105% on its initial investment.

February

- Candover closes the acquisition of leisure complex Parques Reunidos from Advent in a deal valued at more than EUR900m.

March/April

- Pharma business Indas sells to Ibersuizas and Vista Capital for more than EUR500m.

- Six staff leave buyout firm N+1 in a matter of weeks. An unnamed source tells unquote" details of issues related to distribution of carried interest and pay below industry average. The firm denies it all.

May

- Portugal's GP Explorer sells audiovisual business Grupo Alfasom to Spain's Quercus Equity generating a return of 4.54x with an IRR of 138% for Explorer after a holding period of 20 months.

- Investindustrial and Gala Capital acquire antivirus developer Panda Software. The Panda deal took more than a year to complete.

July/August

- Carlyle closes the EUR1.5bn acquisition of Applus+, the largest in Spain since the 2005 Amadeus buyout.

- USP Hospitales is sold by Mercapital to Cinven. The deal had an enterprise value of EUR675m.

September

- Electro-Stocks, an electrical component manufacturer, is taken over by Apax for approximately EUR300m.

October/November

- After a holding period of five years, Corpfin Capital sells its majority stake in charter airline Futura International Airways. Corpfin has made an alleged IRR close to 50% and a multiple that surpasses 5x, making it one of the most successful investments for the Spanish house to date.

Italy

January

- Mandarin Capital Partners, a EUR320m 'bridge fund' aimed at investing in Italian and Chinese SMEs.

March/April

- Clessidra pockets a 90% IRR with the sale of gas transport grid Societa Gasdotti Italia (SGI) to ABN AMRO Global Infrastructure Fund for EUR300m. SGI was sold via a sought-after auction involving several private equity firms and industrials.

May

- IdeA Capital, the fund-of-funds sponsored by publishing giant De Agostini, launches with EUR300m of existing capital.

- Orlando Italy closes its special situations fund at EUR180m.

June

- Venture house 360 Capital Partners reaps a money multiple of around 22-23x and an IRR of 70% by floating online mortgage broker MutuiOnline. The IPO valued the company at more than EUR250m and the offering was 10x oversubscribed.

- Permira splashes out with the takeover of fashion group Valentino, valued at nearly EUR900m.

July/August

- Cape Live, a listed investment vehicle managed by Cape Natixis, floats successfully on the Italian Stock Exchange, with the motto "private equity goes public".

October/November

- ABN AMRO Capital sells Global Garden Products (GGP) to 3i. The enterprise value for the deal is EUR736m. The sellers have made a reported IRR of about 20-25% and a money multiple of around 2x. This was reported to be 3i's largest equity ticket for an Italian deal.