The total value of European buyouts completed in the first half of 2009 has reached its lowest figure since 1995, reaching just €10.3bn, a dramatic drop from the €42.4bn for the same period last year, and around a tenth of the total seen in the opening six months of 2007.
The latest statistics from buyout research house CMBOR also shows that the average deal value now stands at €26.8m, the lowest since 1996.
Deal flow is just over half of what it was in 2007. In H1 2008, 705 deals crossed the finishing line. This year’s figures put the number of deals at 384.
Christiian Marriott, a director of Barclays Private Equity, said: “One of the main drivers behind these figures is the steep drop off in buyouts with a value of more than €10m. Deals valued at under €10m have accounted for 74% of deals so far in 2009. This percentage has typically been between 50 and 55.”
The dominance of the smaller deal is driven by the lack of leverage available, which is also responsible for the increase in equity as a proportion of the capital structure of European buyouts – up from 46% for the whole of 2008 to 59% for the first half of this year.
Private equity presence in the European buyout market has also fallen, with PE-backed deals accounting for 52%, down from the peak of 63% in 2006.