Playing 'piano'

A quarter into 2010 and European private equity dealflow is still fragile, prompting many GPs to remain on the sidelines. Certainly, there has been the odd large deal, particularly in the UK market: KKR's acquisition of pet supplies retailer Pets at Home for a reported £955m from Bridgepoint certainly made the headlines.

Bridgepoint has been particularly busy this first quarter. Aside from the Pets at Home divestment, it acquired social care company Care UK for £423m and forensics and scientific testing company LGC for £257m.

In Southern Europe, however, activity has been more modest. In some instances, like in the case of Mosaicon (page 18), investors have been able to increase their stakes without reverting to a capital increase. Otherwise, we are seeing a number of deals in which backers inject new equity into portfolio companies prior to the refinancing of their debt, as in this issue's Cortefiel deal (see the Southern Europe unquote April issue).

As for exits, they remain rare and, contrary to forecasts, the IPO route has been successful only in a few instances – the most recent one being Kabel Deutschland, which raised €759m for its owner Providence Equity Partners. Trade sales remain the main exit channel but, to the surprise of many, secondary buyouts are also making a strong showing.

Despite the slow pace and the scarcity of buyouts in the region, the industry remains optimistic for the future. And so the old Italian adage goes: "Piano, piano, chi va piano, va sano e va lontano!"

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• Topics
• Investments
• Southern Europe
• Flotation
• Bridgepoint
• Refinancing