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Public-to-Private and PIPE deals track an unsteady path from 2006-2011YTD

by Jessica Hull

  • 08 Dec 2011
  • PE

From 2006 to 2011 YTD, Public-to-private and PIPE deals have waxed and waned. Such PE-backed buyout deals peaked during the boom period of 2007, with 204 deals valued at $332.2bn. Public-to-private and PIPE deals troughed in 2009, in the midst of the global financial crisis, when only 110 deals were reported with an aggregate value of $19.2bn. The number and aggregate value of PIPE and public-to-private deals has not greatly recovered in 2011 YTD; 150 deals have been completed with an aggregate value of $56.5bns.

The number of PIPE and public-to-private deals completed in 2011 YTD split by region is 42%, 39% and 19% in North America, Asia & ROW and Europe, respectively. The lethargic deal-flow in PIPE and Public to Private deals in Europe is likely to be an attribute of the panic in the euro-zone that may come to a head at the EU summit to tackle the prevailing debt crisis.

In 2011 YTD, North American public-to private and PIPE deals have accounted for 70% of aggregate global deal value; such deals have a combined value of $39.6bn. The high aggregate value of North American public-to-private and PIPE deals is attributed to a large overall deal size rather than the number of deals; 10 deals worth over $1bn have been completed. European and Asia & ROW deals account for 16% and 14% of aggregate deal value respectively.   

The most notable public-to-private deal completed in 2011 YTD was the $6.3bn privatisation of Kinetic Concepts backed by an investor group comprising of Apax Partners, CPP Investment Board and the Public Sector Pension Investment Board. Another significant deal in 2011 has been the largely publicised announcement of the £900mn privatisation of Northern Rock which is to be backed by a Virgin Money consortium of investors, including WL Ross & Co., and Stanhope Investments.

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