Buyout boom in continental Europe

Buyouts across continental Europe enjoyed another record year in 2000, up by 16 per cent to e37.4 billion, reveals the annual European Management Buy-out Review, published by CMBOR in conjunction with Deloitte & Touche and Barclays Private Equity. Total deal volume however remained static at around 500 transactions.

The review reveals that the German market has surged ahead with deal value increasing almost four-fold to e15 billion, breaking France’s 1999 record of e8.5 billion. Average deal size in Germany reached an impressive e218 million. Half of the 22 largest deals were in Germany, including the top three transactions of 2000: North Rhine Westphalia Cable (e2.966 billion); Veba Electronics Group (e2.405 billion) and Schmalback-Lubeca (e2.02 billion). In line with an increase in larger transactions, the average continental European deal size was up from e64.2 million in 1999 to e74.3 million in 2000.

In terms of deal number, France remains the most active country for buyouts in 2000 with 133 deals in spite of a six per cent fall in volume, followed by the Netherlands with 75 and Germany at 69.

In spite of a significant increase in UK deal value, up 38 per cent to e37.5 billion, deal numbers in the UK fell, with 583 completions recorded in 2000, closing the gap between deal totals in continental Europe and the UK.

Graeme White, head of Barclays Private Equity, said: “We continue to see scope for substantial further growth in the continental European buyout market as it is still significantly underdeveloped by comparison with the UK where buyouts are running at 2.5 per cent of GDP.”

He cites the key growth drivers of the European continental buyout market as the increasing focus on shareholder value, pan-European consolidation and succession issues in private companies.