CVCA-UPDATE 2-CPPIB expects to be a less active dealmaker

Wed May 25, 2011 12:37pm EDT

* Says pricing will be more competitive for good assets

* CPPIB among the world's top private equity players (Adds details from fourth paragraph)

By Pav Jordan

VANCOUVER, May 25 (Reuters) - Canada Pension Plan Investment Board, one of the world's most active private equity dealmakers in recent years, expects to slow down over the next 12 months as competition for assets rises.

Andre Boubonnais, CPPIB senior vice-president in charge of private investments, said rising liquidity has accelerated the race for acquisitions and driven up prices.

"We see very (few) opportunities that are attractive from a pricing point of view and when there are, there's a lot of competition and we're not particularly good buyers in auctions," Boubonnais told Reuters ahead of the annual Canadian Venture Capital and Private Equity Association conference in Vancouver.

CPPIB, which manages Canada's national pension fund, has taken a role in some of the largest leveraged buyouts of the past two years.

In 2009 it had a hand in three of the top five global private equity deals, including the largest leveraged buyout of the year: the $4 billion acquisition of IMS Health Inc RX.N, a prescription drug sales data provider. CPPIB bought IMS with TPG [TPG.UL], a U.S. private equity firm.

In 2010, CPPIB and Onex Corp (OCX.TO), a Canadian investment fund, went in together on the C$5 billion leveraged buyout of Tomkins Plc TOMK.L, a British maker of car parts, industrial hoses and bath tubs. It was the largest global private equity deal of that year.

"If you ask me if our fiscal 2012, which will end in March 2012, will be as busy as the previous two years, my instinct right now would say probably not," Boubonnais said.

CPPIB was a big winner earlier this month when it and business partners Silver Lake and eBay Inc (EBAY.O) sold Internet phone service Skype to Microsoft Corp (MSFT.O) for $8.5 billion.

"It played out really, really well," Boubonnais said. "We had a number of opportunities for exit."

Truth be told, Boubonnais said he prefers the market for exits than for buying opportunities.

Private equity players have lots of available cash to deploy, and can resort to open debt markets for leverage, while corporate players are sitting on cash saved during the global economic crisis.

"It's sort of a perfect storm," Boubonnais said. "They need to do something with the money, so they are in the market, and you've also got a fairly robust IPO market for the right companies that also provides exit opportunities." (Editing by Frank McGurty)

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