European Private Equity Market

European Private Equity Market Showing Signs of Life

The European private equity market has been hurting particularly badly since the onset of the financial crisis but it may be breathing new life over two years later.  A few European buyout deals involving large private equity firms, including KKR and Carlyle, may be a signal that the industry is beginning to recover.  Two buyouts in Europe is certainly not enough to assume the worst is over, but after such a rough stretch, it's a welcome signal.  Here's more from the Journal:

KKR is paying just under £1 billion ($1.61 billion) to buy U.K. retailer Pets at Home. Meanwhile, several buyout groups, including CVC Partners, Carlyle and BC Partners, are considering a €5 billion ($7.04 billion) bid for German pay-TV operator Kabel Deutschland. If successful, that would be the biggest European leveraged buyout since 2007.

True, it would be a mistake to read too much into either deal. The Pets at Home deal is hardly on the scale of the mega-deals that buyout shops like KKR targeted during their heyday. Nor is it a particularly leveraged: the combined mezzanine and senior debt package is worth around €350 million, with the bulk of the deal financed by equity. The debt may amount to five times Ebitda, well above the three to four times limit that banks were prepared to allow last year, but it is still way below the six to eight times available in the boom.

Kabel Deutschland is also a special case because it is already private equity-owned and its high-yield bonds are widely held among European investors. Its five-year credit default swaps currently trade around 380 basis points, tight for the junk bond market, suggesting there's likely to be good appetite for new bond issuance.   Source

Popular private equity articles:

1. Private Equity Tracker Tool
2. Alternative Investment Jobs
   
3. Career Guide
   
4. Service Provider Directory
5. Private Equity Associate
   

Tags: European Private Equity Market, European private equity, market, european private equity firms, industry, data, 2010, private equity firms in europe, European buyout

Link to This Resource: European Private Equity Market

http://privateequityblogger.com/2010/01/european-private-equity-market.html