PEs prefer to hold exits for better premium

Global buyouts in the first three quarters of calendar year 2013 totalled $174.2 billion, down 23.9 per cent compared with the same period in 2011 ($228.8 billion), said a report by Mergermarker M&A round up for Q1-Q3 2012.

Activity in Europe fell to $61.4 billion, a 30.7 per cent drop from the $88.6 billion announced in 2011. Asia-Pacific (excluding Japan) fared worse with a 40.5 per cent decline to $18 billion year-to-date.

Almost 13.1 per cent of total global M&A in Q3 this year was attributable to private equity buyouts, standing at $56.6 billion. This was the lowest value for global Q3 buyouts since 2009 ($ 24.4 billion). Euro zone unsettlement contributed to a 44.3 per cent drop from Q2 in European buyouts (from $23.3 billion to $13 billion), the largest drop between these quarters since 2007.

The availability of cheap debt in the US made room for more buyouts, borne out by a 15.6 per cent increase in the total value of US buyouts in Q3 2012 ($31.1 billion) as compared with Q3 2011 ($ 26.9 billion). Total US buyouts ($ 81.3 billion) in 2012 have accounted for 46.7 per cent of global buyouts, a modest 5.8 per cent decline from the same time in 2011 ($ 86.3 billion) when compared with other regions.