Strong fourth quarter for European LBOs

Latest research reveals a rise in the value of European buyout transactions in the fourth quarter of 2002 to E22bn, despite a drop in number of deals.

Buyouts in Europe are getting larger, which has pushed up the value of deals getting done in the last quarter of 2002. According to a recent survey by UK information provider Initiative Europe, buyout firms completed transactions worth a total of E22.4bn in the fourth quarter of 2002, the largest total of private equity deals since the second quarter of 2001.

A rise was also evident in the terms of the average deal size, which stood at E97m in the fourth quarter, more than double the E42m average size recorded a year ago.

However, while the value of deals appears to be increasing, there is a continued decline in the volume of deals, which was down 10 per cent from 257 in the third quarter to 231.

Growth capital transactions also saw a dramatic fall in volume, dropping for a sixth consecutive quarter to only 100, a 25 per cent decrease on the previous quarter.

The UK and Ireland remained the most active European market with a 41 per cent share. France accounted 22 per cent of the deal-flow taking.

The largest recorded buyout transaction to be completed in the fourth quarter was the estimated E4.3bn buyout of Legrand by a syndicate of investors comprising KKR, Wendel Investissement, HSBC Private Equity, Goldman Sachs Capital Partners and WestLB, the survey said. Other deals included Charterhouse Development Capital and CDC Equity Capitals E1.8bn buyout of Telediffusion de France and KKR’s E1.7bn purchase of Demag of Luxembourg.