In 2012, Preqin’s Buyout Deals Analyst recorded 63 private equity-backed buyout deals in the Australasia region with an aggregate value of $2.6bn, representing a notable 47% increase in the number of deals and a 70% decrease in the total value of deals from 2011.
The number of private equity-backed buyout deals undertaken in Australasia during 2012 was at its highest level since 2007, when 70 private equity-backed buyout deals were announced with an aggregate value of $6.4bn. This follows a similar trend to that of overall global buyout activity in 2012, which recorded the highest number of private equity-backed buyout deals since the buyout boom-era.
The low aggregate value of private equity-backed buyout deals in the region can be largely attributed to the noticeable absence of any large-cap deals (deals valued at over $1bn) in 2012. The largest Australasia private equity-backed buyout deal of the year to reach close to such value was the privatization of Spotless by Pacific Equity Partners for AUD 720mn.
2012 was significantly different to 2011 in relation to the aggregate value of deals, as 2011 witnessed the highest aggregate value of private equity-backed buyout deals in the region since 2006, with 43 Australasian private equity-backed buyout deals valued at $8.6bn. Two large-cap deals which took place during 2011 in the region accounted for over a third (38%) of the aggregate deal value; the AUD $2.1bn restructuring of Alinta Energy by TPG and Bain Capital’s AUD $1.2bn acquisition of MYOB.
2012 saw the highest proportion of the number and aggregate value of add-on deals in the region from the period 2006 to 2012, with a third of the number of deals and over a fifth (22%) of the value attributed to the investment type. This rise in the prominence of add-on transactions is a reflection of the increasing importance that fund managers are giving to consolidating and strengthening their current portfolio companies as market and credit conditions remain uncertain.
The first two months of 2013 have witnessed 11 private equity-backed buyout deals in the region with an aggregate value of $306mn, which is a potential indicator that the number and aggregate value of deals will reach levels akin to 2012.