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The year that was 2010: Mega-buyouts back in force

John Bakie
22 December 2010

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As the end of 2010 approaches, it will likely be remembered as a year of considerable uncertainty. Fear of a double-dip recession, major debt crises, a fragile economic recovery and the return of mega-buyouts are among the major developments affecting the private equity industry over the past 12 months.

All this week, unquote" takes a look back at the key events in the year that was 2010.

July

The news was dominated by rumours CVC had managed to agree a multi-billion euro debt package to buy Albertis, a Spanish infrastructure business. CVC eventually bought a 25.8% stake in the business in August, valuing it at over €10bn.

In the UK, the mid-market continued to see strong activity, and TPG completed one of the largest deals of the year at that point, with the 300m acquisition of the fashion retailer Republic.

One of the year's biggest restructuring operations also completed in time for holiday months. Gala Coral investors Candover, Cinven and Permira losing up to £670m. Apollo Management, Cerberus, Park Square and York Capital Management took over as equity investors, with £200m of new cash and a £558m debt-for-equity swap.

July also saw the biggest buyout of the year to date, with Candover selling its stake in Ontex in a secondary deal. TPG and GS Capital Partners bought the Belgian hygiene products specialist for €1.2bn.

August

The hot summer months saw an explosion in top end deal activity, as a number of major sales followed on from the Ontex acquisition. In year that had been dominated by smaller transactions, two mega-buyouts of over €1bn in August provided a major boost to European market value statistics. News that Lion Capital was looking to buy Picard Surgelés for over €1bn also added weight to optimism in the market.

RBS's sale of the Global Merchant Services division, better known as WorldPay, finally completed in August after many months of wrangling, with Advent and Bain Capital taking over the firm for £2bn. While at the time it was the largest European buyout of the year, it was soon beaten by engineering company Tomkins, which sold to Onex and the Canada Pension Plan Investment Board with a £2.89bn price tag.

September

Following two UK mega-buyouts in August, Lion Capital bought Picard Surgelés for €1.5bn. The acquisition of the frozen food retailer was not only note worthy for its size, but also for the fact that Lion had made its bid despite not having had a full debt package in place. At the time of deal, it still needed to secure at least €675m of loans, and raise a further €300m from a bond issue. The deal demonstrates the new tactics being pursued by private equity bidders, such as delayed leveraging, to deal with the continuing reluctance of banks to lend.