US take-privates surge

The value of private equity-backed privatisations in the US now represent nearly one-fourth of the total M&A market, according to new statistics.

Amid a surging US mergers and acquisitions market, private equity-backed privatisations now account for nearly one-fourth of the volume, according to new statistics from Dealogic.

The total value of 2007’s announced, year-to-date, financial sponsor-backed privatisations in the US is $167 billion (€124 billion), representing 23 percent of overall US M&A activity.

In 2006, US private equity-backed take-privates represented 20 percent of the US market, while as recently as 2005, take-privates were only 4 percent of the market, according to Dealogic.

The announced acquisitions of First Data ($27.9 billion) and Sallie Mae ($25.6 billion) have placed the financial services sector at the top of the take-private league tables, followed by utility and energy companies.

Globally, there have been $253 billion in private equity-backed take-privates announced this year. In 2006 the global total was $367.1 billion, while in 2005 the take-private total was $75.4 billion.

Private equity deals in general are accelerating in volume. Financial sponsor-backed M&A in during the second quarter of 2007, at $230 billion, is already up 17 percent over the first quarter.

Deals involving Kohlberg Kravis Roberts account for 31.4 percent of all buyout deals so far this year. The firm has joined $122.5 billion worth of deals since January, according to Dealogic.