European Buyouts Fall In 2008

Mar 6 2009 | 12:06pm ET

The total value of European private equity-backed transactions fell 59% in the final quarter. The €8 billion (US$10 billion) in deals are the lowest since the second quarter of 1997, according to a new report.

European buyout values for the full year were € 73billion (US$91 billion), a decline of 61% from 2007’s record levels, according to Candover Investments, a European buyout firm.

In volume terms, declines were more modest, with 1,404 p.e. transactions reported in Europe during the year, a fall of 14% compared to 2007. However, only 261 transactions were completed in the final quarter of 2008, by far the lowest recorded number over the year and a 32% decline compared to the prior quarter

“The European buyout market has fallen dramatically and Q4 values were lower than at any time in the last decade,” said Colin Buffin, managing director of Candover. “The worsening macro-economic climate and lack of availability of debt financing has prevented most private equity companies from completing larger buyouts, and it is now taking its toll on the mid-market too. As there is no prospect of the debt markets returning in the foreseeable future, the buyout market will continue to suffer.”

“In the meantime, private equity companies are focused on their current portfolio and ensuring their investments are as well equipped as possible to ride out what looks set to be a long and sustained downturn.”

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