PE-backed leverage deals up more than 30%

Latest figures from data provider Dealogic have confirmed the enormous amount of liquidity in the debt markets that was available for private equity deals in 2005.

According to Dealogic’s Global Loans Review, sponsor-driven leveraged financings continued to rise in 2005 globally, with volumes increasing by 31 percent to $444.2 billion (€365.3 billion), compared with €339.7 billion in 2004.
 
The number of deals saw a more modest increase, rising from 901 globally in 2004 to 970 in 2005.
 
The Blackstone Group topped the ranking for sponsor-backed debt financings in 2005, with 30 deals totalling $16.755 billion. Kohlberg Kravis Roberts came second with 19 deals totalling $15.292 billion and Texas Pacific Group third with 20 deals totalling $13.47 billion.
 
Rounding out the list were Goldman Sachs Capital Partners, PAI Partners, Warburg Pincus, Bain Capital, Permira, CVC Capital Partners and The Carlyle Group.
 
In a year of mega deals, one of the most highly leveraged transactions was September’s $15 billion acquisition of Ford Motor’s Hertz car rental division by a consortium comprised of Clayton Dubilier & Rice, The Carlyle Group and Merrill Lynch Global Private Equity. The deal was financed with $2.3 billion of equity split three ways, alongside bank loans totalling $5.3 billion and over $7 billion of asset-backed securities tied to Hertz’s car rental fleet.
 
In Europe, highly leveraged deals included the $5.6 billion acquisition of Spain’s Amadeus Global Travel Distribution by BC Partners and Cinven in January and the $5.3 billion purchase of German property company Viterra by Terra Firma Capital Partners in May.
 
Sponsor-related recapitalisations and refinancings reached record levels in 2005, with figures standing at $162.1 billion globally. This was an increase of 15 percent on the $140.7 billion reported for 2004.