European LBOs outstrip US deals by four to one

Baring Capital Partners' E1bn acquisition of Danone’s dairy division Egidio Galbani was only the latest in a series of deals that has established Europe as the key market for leveraged buyouts, reports The Daily Deal.

Seven of the top ten LBOsby size in Europe  to date took place in 2001. Those transactions, topped by Apax Partners and Hicks, Muse, Tate & Furst's E3.59bn acquisition of yellow pages group Yell [voted Buyout of the Year by this site's readers], took the value of European buyouts past US deals in 2001. In fact, figures published by Thomson Financial suggest that the volume of LBO activity in Europe was four times that recorded in the US.

Behind the Yell deal came the E3.1bn acquisition of Meridien Hotels by Nomura Principal Finance and Royal Bank Private Equity. Other notable deals in 2001 included the sale of Eircom to Soros PEP for just over E3bn, as well as deals involving Whitbread, Cognis and E Kabel. 

To pull off the biggest deals, European firms have been raising mammoth cash pools. BC Partners is investing its seventh fund, a E4.3bn cash pot which it raised two years ago.

CVC Capital Partners' also passed the E4bn mark last year, raising E4.7bn. Apax Partners has a E4.4bn fund, which also closed in 2001. Cinven has received commitments of more than E3.5bn for its third fund. Charterhouse is pulling together a E3bn fund, whilst Doughty Hanson is also expected to tap investors this year too.

There are a number of deals on the horizon for firms which have been generating massive funds. Recent interest has centered around French electrical equipment maker Legrand, which is expected to fetch about E5bn.