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Average Deal Size for Global PE-Backed Buyout Deals 2006-2011

by Jonathan Parker

  • 16 Dec 2011
  • PE

The average size of private equity-backed buyout deals has varied greatly over the past six years, which may come as no surprise given the changing economic backdrop throughout the period. Predictably, the highest average value of global buyout deals was recorded in the boom year of 2006, at around $760 million, while in the following year a similarly high value of $630 million was committed, on average, to each deal. However, as the global financial crisis began to unfold, average deal sizes fell dramatically. In 2008 the figure was less than $270 million, and 2009 saw a further fall to around $180 million. As the global economy began to recover, the average deal size saw an upturn to around $270 million in 2010.

Although this year has seen a further increase in the average size of buyout deals, the quarterly figures show an opposite trend. In Q2 2011, the average deal size was over $300 million. This fell to below $285 million in Q3, and looks set to drop to around $260 million in Q4.

Clearly, average deal size is influenced greatly by the frequency of mega buyout deals. While in 2006 and 2007 it was not uncommon to see buyout deals valued at over $5 billion (there were 21 such deals in each year), just one deal valued at over $5 billion was recorded in each of the following three years. The 28 largest private equity-backed buyout deals from 2006 to 2011 all occurred in either 2006 or 2007, which goes some way to explaining the high average values seen in those years. The top 10 deals were all public-to-private transactions, with values ranging from $22.4 billion for the acquisition of Kinder Morgan, to the $45 billion paid by a consortium of investors for Energy Future Holdings.

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