End of year results suggest the private equity deals sector has recovered following the financial crisis, with both the value and volume of deals and exits returning to, or exceeding, pre-crisis levels, according to latest figures released by Preqin.
Some 811 PE-backed exits occurred in 2010, with an aggregate exit transaction size of USD203bn. This is almost three times the aggregate exit value seen in 2009, (USD73.6bn), with Q4 exit value at USD71.8bn – the highest quarterly figure on record.
The largest deal announced during 2010 was the USD5.3bn public-to-private acquisition of Del Monte Foods Company by Kohlberg Kravis Roberts, Vestar Capital Partners and Centerview Partners, which was announced in November 2010.
Almost half of all deals announced globally in 2010 were leveraged buyouts, accounting for 53% of the aggregate deal value worldwide during the quarter.
Public-to-private deals contributed 26% of the aggregate value of deals globally during 2010, but made up less than 5% of the number of deals.
Almost half of all deals announced globally in 2010 were leveraged buyouts, accounting for 53% of the aggregate deal value worldwide during the quarter.
In Q4 2010, 593 private equity buyout deals were announced, with an aggregate value of USD64.2bn. This is a 6 per cent increase in aggregate value from Q3, when 593 deals worth USD60.6bn were announced
Deal flow in north America during 2010 increased 130% from 2009, and 35% from 2008. In Q4 2010, aggregate deal value in the region increased 40% from the previous quarter, with 323 deals valued at $38 billion announced in Q4 2010, up from the 296 buyouts valued at USD27.2bn in Q3 2010.
European deal flow stood at USD68.1 in aggregate value in 2010, almost three times the USD24.2bn announced in Europe in 2009, but there was a 35% dip in European aggregate deal value in Q4. Some 204 buyouts valued at USD17.6bn were announced, down from the USD27.3bn in deal value witnessed during Q3 2010. However, European deal flow in Q4 2010 was 39% higher than the same period in 2009.
Asia and Rest of World saw a 39% increase from Q3 during Q4, with 66 deals valued at USD8.6bn announced in the region during the period in comparison to the USD6.1 in buyouts reported in Q3 2010.
“Global private equity deal flow has witnessed a resurgence during 2010 as a whole, with deal flow globally this year representing the strongest year for PE deals since the onset of the global financial crisis," says Manuel Carvalho, Managing Analyst – Buyout Deals at Preqin. "In particular, this year has been notable for a surge in both North American and European deals, with North American deal flow in 2010 more than double that witnessed during 2009, and European deal flow in 2010 almost three times the value of deals seen in the region in 2009. In addition, there has been a continued surge in secondary buyouts globally during 2010, with USD49bn of secondary buyouts announced during the year– almost five times the value of secondary buyouts seen during 2009.
"The increase in activity should also signal an improvement in the fundraising market, with institutional investors’ confidence towards the market increasing, while high distribution levels will lead to more capital being reinvested in new vehicles as investors maintain their allocations to the asset class.”
