What the future holds

01 October 2009

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The worst of the storm may be behind us, with investors regaining their appetite as IPO markets slowly start opening up. Indeed, Madrid-based travel agency Amadeus, backed by Cinven and BC Partners, has hired Rothschild to advise on its planned flotation of 30% of the company's capital; an EUR8bn deal. If it goes through, it would be among the biggest IPOs European markets have seen in two years

LBO debt restructurings are otherwise slow to pick up pace. More funds and advisories are being set up to address what the market perceives to be a pool of opportunities. In Germany, a consortium led by distressed investors Apollo Management, TowerBrook Captial and York Capital acquired a significant portion of roofing business Monier's debt at a discount prior to taking control of the business from under PAI partners' feet. Meanwhile, HIG Capital's distressed fund Bayside took a stake in 3i-backed Dutch multimedia company VNU following a restructuring of the company's debt. But it is not just something private equity funds are doing. In May this year, UK retailer Alliance Boots bought back more than £400m of its debt from distressed sellers at less than 70p to the pound.

While some will succeed in profiting from debt, the starved market is likely to see most of its activity hail from growth capital deals, which are set to become the favoured deal type of 2010.

It has been a year since the collapse of Lehman and financial markets seem to have regained some degree of "normalcy". Hopefully this is not the first "V" of a W-shaped recovery.

Yours sincerely,

Francinia Protti-Alvarez

Editor, Southern Europe unquote"

Tel: +44 20 7004 7476

francinia.protti-alvarez@incisivemedia.com.