With their limited partners eager for distributions, and buyers lining up to deploy money, U.S. buyouts shops exited investments at a far greater pace last year than in 2009.
Thomson Reuters, which publishes Buyouts magazine, tracked 323 exits through mergers or acquisition in 2010 through Dec. 14, an increase of more than 100 transactions from the 206 completed a year earlier. Thomson Reuters counted 25 companies that held initial public offerings in 2010 through Dec. 14, and most are trading above their offering prices, boding well for future PE-backed IPOs. In 2009, the final tally was 16.
The increase in exitl numbers was not accompanied by a rise in disclosed valuation, however, as the prior year benefited from one particular exit. Atlantis Holdings’s sale of Alltel Corp. in January 2009 to Verizon Wireless Inc. was valued at $28.1 billion. Atlantis Holdings is a special purpose vehicle created by
The largest M&A exit in 2010 closed in June when affiliates of
IPO activity for companies sponsored by U.S.-based buyout firms has steadily improved during the past two years, up from just eight completed in 2008. However, the pace of recovery was slow in 2009, with only one done by the end of July. Things didn’t really pick up until October 2009 when six portfolio companies went public.
The pace was more evenly distributed in 2010. Four IPOs were completed during the first quarter, which was a good sign of things to come. Seven IPOs were completed for each of the other quarters of the latest year (through mid-December).
Oasis Petroleum Inc. had the largest IPO of all LBO-sponsored companies in 2010.
NXP B.V. had the highest post-offer value ($3.49 billion) of the 25 portfolio companies that went public in 2010. (Thomson Reuters identified post-offer valuations on 19 of the 25.) NXP, a Netherlands-based semiconductor company, raised $476 million when it sold 34 million shares for $14 apiece in August. It is backed by a number of private equity shops including Bain Capital,
Bain Capital-backed Sensata Technologies Inc. also generated an impressive post offer value at $3.08 billion. The maker of car parts sold 31.6 million shares for $18 a share to raise $568.8 million. Bain Capital picked up the business from Texas Instruments Inc. in 2006.
Many of the portfolio companies that went public in 2010 are tracking ahead of their IPO prices. Only four are trading below IPO prices, and we didn’t have enough information to calculate total returns since going public for three other companies. Eighteen are in positive territory, including six that are trading more than 50 percent above IPO prices, as of Dec. 15. Oasis Petroleum’s stock price has appreciated the most, up 84.93 percent.