* Buyouts total 9.1 bln euros in Q2 -CMBOR study
* Sellers adopt wait-and-see stance on disposals
* British buyouts 3.3 bln eur in Q2, Nordic 2.5 bln eur
By Simon Meads
LONDON, July 9 Private equity dealmakers are
sitting on their hands, unwilling to sell their companies until
the euro zone stabilises and debt markets improve enough to
support higher prices, according to a study from the Centre for
Management Buyout Research (CMBOR).
The impasse is leading to a downturn in new deals and
hindering the sale of companies between rival private equity
firms, an activity that can often account for around half of
transactions in the industry in a year.
The value of European buyouts totalled 9.1 billion euros
($11.3 billion) in the second quarter, a 34 percent fall on the
first three months of the year, and almost 60 percent down
against the second quarter of last year, the study, sponsored by
Ernst & Young and private equity group Equistone, showed.
"Sellers remain cautious and many are adopting a view of
wait and see, until the landscape across Europe shows more signs
of stabilising in the long term," said Sachin Date, Europe,
Middle East, India and Africa private equity leader at Ernst &
Hopes of a sustained recovery among private equity
dealmakers, after a flurry of large deals in the first half of
2011, were dashed later in the year as investors fretted about
the future of the euro zone and as debt markets froze.
Since then, buyout activity has been patchy.
Some large disposals, such as KKR's deal to sell a
45 percent stake in pharmacy group Alliance Boots to U.S. rival
Walgreen for $6.7 billion, have grabbed the headlines.
However, selling companies remains difficult, private equity
professionals and their advisers say.
"What I have observed this year is while you are able to
sell a good asset in almost any condition, you find it much
harder to sell a so-so asset in these conditions," said 3i CEO
Simon Borrows when he outlined the private equity group's new
strategy last month.
Britain, seen as a hub for private equity activity in
Europe, accounted for 3.3 billion euros of deals in the second
quarter, while Nordic markets generated a combined value of 2.5
billion, according to the CMBOR research.
Despite its strong economic position, the value of buyout
deals in Germany fell to just 200 million euros in the second
quarter, the data showed, as owners refused to sell companies
for prices that did not meet their expectations.
But some are hopeful of a pick-up in activity towards the
end of the year.
"Continental Europe continues to suffer from unresolved
macroeconomic uncertainties. However, with some important
political elections behind us, this could improve towards the
end of 2012 as the euro zone crisis stabilises," said Equistone
director Christiian Marriott.