Volume and value of European transactions falls again

The number of European private equity deals dropped 21% to 322 compared with the 409 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 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 quarterly total since 2004 and 33% lower than the 204 buyouts reported in Q4 2007. Only three completed deals were valued at more than EUR1bn - the EUR3.0bn buyout of Biffa, led by Montagu Private Equity, the EUR1.5bn buyout of Techem AG by Macquarie and the EUR1.4bn buyout of Emap's B2B division by Apax.

However, the UK continued to outperform other regions in Europe, maintaining its position as the largest market in terms of both volume and value. In total, 11 of the 20 largest European private equity backed transactions occurred in the UK.

The UK market remained fairly resilient and in value terms fell just 7% to EUR9.3bn compared to Q4 2007. All other European regions experienced a more pronounced fall. Only the Nordic region recorded an increase in volume, up 67% from 12 to 20 deals, although the total value of buyouts in this region fell 26% to EUR1.9bn, underscoring the decline in larger transactions.

Expansion deals are also suffering, with value more than halving to EUR1.2bn and volume down from 122 in Q4 2007 to 102 in Q1 2008. Early-stage players had more to cheer about. Value was up on the final quarter of last year, from EUR431-459m and volume was identical at 83.

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