EUROPE - LBO market smashes EUR 100bn barrier

Guy
21 February 2006

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2005 saw further significant growth in the European buyout market with the total value of deals topping EUR 100bn for the first time ever, according to the latest European Buyout Review due to be published in March 2006 by Incisive Media in association with Bridgepoint.

The volume of EUR 1bn+ deals reached its highest level in 2005, with substantial increases also recorded in the European mid-market, largely reflecting the level of fundraising activity during the year.

Family and private vendors generated the highest proportion of dealflow in 2005 and the trend for secondary buyouts continued markedly in the year.

The value of UK deals increased modestly over 2004 figures, although the UK’s proportion of deal value across Europe slipped to just 26% from 33% in 2004 due to significant deal activity in Continental Europe.

Old economy and consumer-focused sectors attracted the highest level of private equity investment in 2005 with almost half the total value of buyouts in European made in the industrials, engineering, chemicals and support services sectors.

Volume of EUR 1bn plus deals reaches its highest level ever. 28 deals valued at over EUR 1bn were completed in 2005 with the total value up 87% on 2004.

The mid-market dominates the European market. The total value of deals in the EUR 25m-EUR 500m range rose 17% to EUR 42bn in 2005 with the total volume of deals up 18% to 360 transactions. Deals in the EUR 500m to EUR 1bn range were also up 25% to 34 deals in 2005 with a total value of EUR 24.4bn.

The European Buyout Review, published annually by Incisive Media, provides comprehensive statistics on the level and use of private equity in buyouts across Europe.