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Global Private Equity-Backed Buyout Deals by Industry - March 2012

by Jessica Hull

  • 22 Mar 2012
  • PE

In 2012 YTD (as of 22nd March 2012), the greatest number of private equity-backed buyout deals have been recorded in the industrials sector, representing nearly a quarter of all deals, yet only attributing to 13% of aggregate value. In 2011, industrials were also the most prominent sector in terms of number and aggregate value, representing 26% and 19%, respectively.

Despite this, industrials have been surpassed by the energy sector in terms of aggregate value of deals by contributing 27% of total deal value this year. This large proportion of aggregate value added by the energy sector can largely be attributed to the announcement in February 2012 of the acquisition of El Paso Corporation Oil and Natural Gas Exploration and Production Assets led by Apollo Global Management, along with Riverstone Holdings, Access Industries and Korea National Oil Corporation. This deal is valued at approximately $7.15bn and will complete subject to customary closing conditions. Another notable deal in this industry sector includes the announcement of a $2bn growth capital investment into Cheniere Energy by Blackstone.

Other notable sectors include business services and consumer and retail, which has accounted for 16% and 15% of all deals, respectively, and 12% and 16% of the value of deals globally. Year to date, there has been a proportional increase in the value of investments in business services, in comparison to 2011, by four percentage points. The second largest deal this year has been in the business services sector, which is the likely reason behind this 4% increase; it was announced that TransUnion would be acquired by Advent International and Goldman Sachs Merchant Banking Division from Madison Dearborn Partners and The Pritzker Group for approximately $3bn.

Information technology and healthcare have continued to be important sectors in terms of both aggregate value and number of deals in 2012 YTD, summing to 23% of all deals, while representing 17% of the global deal value. Telecoms and media shows a similar pattern to last year in which the proportionate aggregate value is double the proportionate number of deals; 5% of global buyout deals in this sector hold 10% of the aggregate value.

The split of buyout deals by industry are currently very similar to last year’s proportional split, yet in terms of aggregate value the focus has shifted from industrials to the energy sector. This shift could reflect an important focus for the future as more investors seeing the energy sector as a valuable investment. One explanation is that prices of core energy resources are continuing to increase, which is a wider reflection of increasing demand from emerging economies and falling supply as energy reserves become more difficult to locate and access.

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