Current 2008 deal data: ‘as bad as you’d expect’

BVWireIssue #65-3
February 27, 2008

Last week Thomson Financial posted year-to-date leveraged buyout numbers, “and they’re as bad as you’d expect,” according to PE Week Wire (Feb. 21, 2008).  So far this year, the global market has seen barely over a hundred LBOs, for a total value of $7.8 billion.  That’s 73.2% off from the $29.1 billion worth of LBOs this time last year.  “The numbers get slightly better if you look at M&A activity by LBO-backed portfolio companies,” PE Wire adds, “but not by much.”  Current figures for YTD 2008 deals stand at $14.6 billion, off nearly 70% from the $47.9 billion done at this time last year.

The decline in leveraged buyouts is slashing fees for investment banks, according to a recent Bloomberg report.  “Buyout firms paid $5.4 billion to securities firms in the U.S. and Europe in the second half of 2007,” 38% less than the first six months.  The pace of announced buyouts also slumped in the second half of 2007, with PE firms announcing $202 billion of deals worldwide, about 66% less than in the record first six months, Bloomberg data show.  In 2008, PE firms have so far announced $3.5 billion of deals.

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