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Private Equity-Backed Trade Sales – May 2013

by Jonathan Parker

  • 30 May 2013
  • PE

With the announcement this week that Bausch & Lomb, backed by Warburg Pincus and Welsh, Carson, Anderson & Stowe, will be acquired by Valeant Pharmaceuticals for $8.7bn and last week’s announcement that Actavis Group will acquire private equity-backed Warner Chilcott for $8.5bn, trade sale activity has reached its highest level since 2011. This month has seen 62 trade sale exits globally, valued at a total of $23.2bn – the highest aggregate value and also the third highest number of trade sales since May 2011. This sudden resurgence in the aggregate value of private equity-backed trade sale exits comes off the back of a poor first quarter in 2013, which registered the lowest total value of trade sale exits since Q3 2010. Similarly, April saw just 42 private equity-backed trade sales globally, valued at an aggregate of $4.7bn.
 
Trade sales are a particularly prominent form of exit for private equity fund managers, with 57% of the number and 55% of the aggregate value of exits announced globally so far this year falling into this category. Similarly, trade sales accounted for 55% of both the number and aggregate value of private equity-backed exits in 2012. Across the period 2006-2012, 2008 saw a peak in the number and aggregate value of trade sales as a proportion of all exits, making up 56% of the number and 70% of the aggregate value of exits globally. 2013 so far has seen an increase in both the number and aggregate value of trade sales as a proportion of all exits in North America, with 61% of the number and 72% of the aggregate value. In Europe, despite an increase in number from 54% to 59% of all exits, trade sales have accounted for a significantly lower proportion of all exits in terms of aggregate value, with just 40% compared to 64% for 2012 as a whole. Meanwhile, in Asia and other economies outside North America and Europe, there has been a fall in trade sale activity as a proportion of all exits, with the number dropping from 45% in 2012 to 41% in 2013 and value falling from 31% to 25%.

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