Private Equity-Backed Buyout Deals in Q3 2012

by Jessica Hull

  • 04 Oct 2012
  • PE

During Q3 2012, 681 private equity-backed buyout deals were announced with an aggregate value of $71.6bn, which represents a 6% decrease in the number of deals compared to Q2 2012, but a 9% increase in aggregate deal value since the previous quarter. These figures are attributed to the returning prominence of large-cap deals in the private equity arena, with 20 deals valued over $1bn in Q3 2012 compared to only seven such deals occurring in Q1 2012.

A total of 283 private equity-backed exits were announced globally in Q3 2012, valued at $66.5bn, a decrease compared to the previous quarter in terms of number and aggregate value of exits by 13% and 19%, respectively. This can in part be attributed to a reduction in large-cap exits, with 19 exits valued at over $1bn in Q3 2012, compared to 27 exits at the same valuation during the last quarter. Even so, the aggregate exit value in Q3 2012 is markedly above that of Q1 2012, as Q2 2012 witnessed a substantial growth in aggregate exit value. Additionally, the IPO and follow-on share sale activity is still remaining lacklustre; only 33 IPOs taking place in Q3 2012, which is likely due to market volatility dampening investor’s confidence. Fund managers are likely to hold off on listing companies on the stock market until market conditions pick up.

North America has continued to stand out as the most active area for buyout investment, with the aggregate value of deals in the region continuing to rise after the surge in value in Q2 2012. In Q3 2012, North American deals accounted for two-thirds of all global buyout deals in terms of aggregate value and has witnessed a doubling in value since Q1 2012 to $47.5bn. European aggregate deal value decreased by 21% to $13.6bn during Q3 2012 from $17.3bn in Q2 2012 and the number of deals completed remained at subdued levels previously witnessed in late 2009 and early 2010. Aggregate deal value in Asia and Rest of World region has been sustained at $10.4bn, which is a similar value to the previous quarter, and close to double the value seen in Q1 2012. These figures support the idea that despite the persistence of market uncertainty, North America has largely weathered the storm, in part to improved credit availability, whereas Europe’s economy has continued to be heavily affected of market uncertainty and poor credit conditions.

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