PE-backed buyout deals touch $67 bn

The upturn in global private equity-backed deal activity continued for the third consecutive quarter this year, with transactions in the space amounting to $66.7 billion, according to a study.

According to data compiled by global research firm Preqin, a total of 515 private equity buyout deals were announced in the third quarter this year, with a total value of $66.7 billion.

“Global private equity deal flow has witnessed a continued resurgence in Q3, 2010, surpassing deal flow levels during the previous quarter and therefore representing the strongest quarter for buyouts deals in the post-financial crisis era,” Manuel Carvalho, said managing analyst-buyout deals. The quarter under review saw a continued surge in secondary buyouts globally, with $26.8 billion worth buyouts being announced during the quarter. This took the value of secondary buyout deals backed by private equity during the year to $41.1 billion — more than four times the value during the whole of 2009.

The largest deal of the quarter, as well as this year, was the public-to-private acquisition of Tomkins Plc by Onex Corporation and CPP Investment Board in a deal valued at $5 billion.

Even though the deal flow in Asia witnessed a slight decrease from the previous quarter, it continued to remain above the level seen the previous year. A total of 80 deals valued at $6.2 billion were announced in the region in the third quarter of 2010, translating into a 62 per cent increase in overall value from $3.8 billion a year earlier.

The report further said buyouts valued at over $1 billion accounted for 60 per cent of the deals in the September quarter this year. In addition, public-to-private deals accounted for 23 per cent of the deals.

During the quarter under review, 190 PE-backed exits occurred, with an exit transaction size of $56.7 billion. This was a 22 per cent increase in aggregate exit value compared to the previous quarter, when 169 exits valued at $46.4 billion took place.

“Exit activity during the third quarter of 2010 represents the most active period for exits in the post-financial crisis landscape, with activity matching the levels of exit activity seen during the pre-financial crisis era,” the report added.