US Buyout Deals Involving Exclusively Non-US Based Investors

by Jonathan Parker

  • 03 Nov 2011
  • PE

Whilst the majority of US private equity-backed buyout deals include investment from at least one US-based investor, 2011 has seen a significantly higher proportion of the total deal size comprised of deals with no US-based investor than any previous year in the period 2006-2011. In 2006, 4.3% of all buyout deals in the US did not involve a US-based investor. These deals accounted for just 2% of the total value of US deals. In the following year, more than 6% of all US buyout deals did not involve a US-based investor and, due to an increase in the average size of these deals, these investments accounted for 8.6% of the total value of buyouts in the US.

These figures for 2007 represented the highest proportions for any year in the period 2006-2010. In contrast, 2008 saw the lowest proportion of US deals from exclusively non-US investors, with less than 4% of the total number of deals, although these deals accounted for around 3.5% of the total value of US buyouts, which is higher than the 2006 figure. In 2009, the number of US deals with no US-based investor increased to around 5% of the total number of US deals, before falling back below 4% in 2010. The proportion of the total value also increased, to over 7.5%, before falling below 5% in 2010.

In 2011 to date, deals in the US that did not involve a US-based investor have risen as a proportion of the total number, accounting for around 5.5%. Interestingly, these deals have accounted for more than 14% of the total value of US buyout deals, a sizeable increase on 2010, and nearly 3x the average proportion from 2006 to 2010. This is partly due to the $6.3bn acquisition of Texas-based medical device company Kinetic Concepts, which was announced in July 2011. The investment consortium consists of Apax Partners, based in the UK, and CPP Investment Board and the Public Sector Pension Investment Board, both based in Canada.

Other notable US buyout deals by non-US investors include the $7.75bn acquisition of Cengage Learning in 2007, by Apax Partners and OMERS Private Equity, the private equity arm of Ontario Municipal Employees Retirement Worldwide Group. Also in 2007, AWAS, a portfolio company of Terra Firma Capital Partners, purchased Pegasus Aviation Finance, in a deal valued at $5.2bn. Terra Firma is based in London, UK, while AWAS, an aircraft leasing company, is headquartered in Dublin, Ireland.

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