Private Equity News & Analysis

European buyouts down to 2004 levels

The number of buyouts in Continental Europe in the first half of 2008 was down 19 percent compared to the same period last year, while the average deal size has dropped from €113 million to €70 million.

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Data from the Centre of Management Buyout Research underlines the slowdown in private equity investment activity in Continental Europe. The first six months of 2008 saw just €22.7 billion ($33.5 billion) of deals, compared with €63.4 billion in the same period in 2007.

The number of buyouts has fallen back to 2004 levels, with just 325 deals completed in the first half of 2008, 19 percent lower than the 401 deals completed in the same period of 2007.

The average deal size for the first six months of 2008 was just €70 million, compared to €113 million for 2007.

The German market dominated in the first half of the year, seeing 67 completed deals with a combined value of €6.5 billion. France followed with 66 deals worth €4.2 billion.

The UK buyout market, which has also suffered a slowdown, has been buoyed by a steady stream of public-to-private deals; 10 were executed in the first half of 2008 with a combined value of £5.2 billion.

“The amount of UK take-private deals in the first half of 2008 is not far away from the total for the entire year of 2006, which was £6 billion. The public markets are certainly providing a more fruitful hunting ground than secondary buyouts and corporate sales,”said Christiian Marriott, director of Barclays Private Equity, which sponsors the research.