European firms set IPO record in 2010

CMBOR figures show Europe’s exit markets heating up during last year, boosted by a resurgence in IPOs which reached a total value of €21.6bn.

European private equity-backed IPOs hit new heights during 2010, according to data released today. Financial sponsors floated 14 portfolio companies during 2010, compared to only one in 2009.

Private equity-backed IPOs in 2010 reached a total value of €21.6 billion, a significant jump from the €676 million recorded in 2009 and a new IPO record, said the Centre for Managament Buy-out Research,  which is sponsored by Barclays Private Equity and Ernst & Young and published by PEI Media.

In March, Providence Equity Partners’ €5.3 billion IPO of Kabel Deutschland, Germany's largest cable television operator, proved the largest exit in 2010, said CMBOR.

The rise in public offerings was also illustrative of a wider rebound in European exit activity. Overall the value of European businesses sold by private equity firms last year totalled €55.7 billion, the first time the figure outstripped the total value of investments, according to CMBOR. Europe posted roughly €49 billion in buyout activity in 2010, more than doubling the approximate €18 billion deployed in 2009.

European fund managers also started knocking on each other’s doors more often for deal flow in 2010. The overall value of European secondary buyouts accounted for almost half of total deal value—shooting to €23 billion from just €4 billion in 2009. In total Europe posted roughly €49 billion in buyout activity in 2010, more than doubling the approximate €18 billion deployed in 2009.

The growth in secondaries reflects the trend for medium-sized PE houses to sell on their portfolio companies to global houses as part of their organic evolution or as part of a buy-and-build strategy

Sachin Date

The secondary bonanza shouldn’t be seen as anything new, said Sachin Date, a private equity partner at Ernst & Young, in a statement. “The growth in secondaries reflects the trend for medium-sized PE houses to sell on their portfolio companies to global houses as part of their organic evolution or as part of a buy-and-build strategy,” said Date.

Notable European secondary transactions include Kohlberg Kravis Roberts’ £955 million (€1.1 billion; $1.5 billion) acquisition of Pets at Home from Bridgepoint in January and Cinven’s €800 million acquisition of medical technology business Sebia from Montagu in March.

For more on Europe’s private equity performance, see our upcoming 2010 Annual Review in March.

For information on purchasing in-depth CMBOR reports, click here.