Q4 2011 unquote” Private Equity Barometer from Arle Capital Partners

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Q4 BUYOUTS DROP TO LOWEST LEVELS FOR 15 YEARS - Total Q4 deal value down 39% on Q3, volumes at lowest level since Q2 1996 - Emphatic year of two halves with H2 deal values down 39% and volumes down 31% on H1 after a strong first half - Full year deal volumes down 11.5% on 2010, values down 4.7%

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The Eurozone sovereign debt crisis, the resultant economic frailty and the scarcity of available leverage finance conspired to delay or wreck a significant number of transactions. The outlook for the first quarter of 2012 is for more of the same.

Preliminary figures released today in the Q4 2011 unquote” Private Equity Barometer (published by unquote”) in association with Arle Capital Partners.

EUROPEAN PRIVATE EQUITY DEAL ACTIVITY

  • Major drop-off in overall deal volumes with just 192 deals recorded in Q4, the lowest level since Q4 1996 (158)
  • Total deal values in Q4 were €10.5bn, a 39% fall against Q3
  • Final quarter figures accentuate the gulf between H1 and H2 in 2011 – H2 values down by 39% and volume down by 31% on H1
  • For 2011, deal activity was down 11.5% at 1059 (1196) and deal values were down 4.7% at €72.66bn (2010: €76.29bn)

EUROPEAN BUYOUTS

  • Q4 buyout dealflow witnessed a dramatic fall of 31% on Q3, with only 79 deals recorded, the first time over the sample that fewer than 100 buyouts were recorded in a quarter
  • Q4 buyout values dropped 39% to €9.4bn, the first time in seven quarters that values dropped below €10bn, and the lowest total since Q2 2009
  • Buy-out activity decreased across all regions with the exception of Benelux where dealflow rose from seven deals to eight and value increased 9% to €1.8bn
  • Mid-market buyouts, covering deals worth between €100m-€1bn, saw the sharpest decrease falling 38% from 31 to 19; value dropped 48% from €8.5bn to €4.4bn
  • Just two deals valued at in excess of €1bn+ were transacted in Q4, one less than the third quarter total, with value falling by 31% from €4bn to €2.8bn
  • Over the year, European buyouts held up well and rose by 6% to a total of 450 for the year from 426 in 2010, helped by two strong first quarters
  • Total value in the buyout sector was also fairly level totaling €66.62bn for 2011 compared to €67.13bn for 2010

Commenting on the figures and outlook for 2012, John Arney Managing Director of Arle Capital Partners said:

“It should come as no surprise that the stream of first half (private equity) activity became a meagre trickle by the final quarter of 2011. The Eurozone sovereign debt crisis, the resultant economic frailty and the scarcity of available leverage finance conspired to delay or wreck a significant number of transactions. The outlook for the first quarter of 2012 is for more of the same.

“However, these issues will eventually subside and with private equity managers looking to deploy committed capital ahead of approaching expiry dates, there is considerable pent up demand for new deals. I would expect secondary buyout activity to lead the way as LBO lenders maintain their bias towards more responsible borrowers.

“The challenge for private equity owners is the search for increasingly elusive growth. Lateral thinking and a highly active approach to ownership is essential given that performance-enhancing boosts from unnatural levels of debt, remain firmly off the table.”

For further information please contact:
Arle Capital Partners
John Arney/Julie Foster: +44 (0) 20 7895 2754
Julie(dot)foster(at)arle(dot)com

Vetch Mahne
Lindsay Vetch / Christian Mahne: +44 (0) 20 3488 3100 / +44 (0) 77 7594 5369
arle(at)vetchmahne(dot)com

Notes to editors:
Arle Capital Partners
Arle is a private equity partnership formed in April 2011 following the buyout of Candover Partners. Arle focuses on businesses in the energy, industrial and services sectors typically based within the North Sea Rim but with operations that extend beyond these markets. North Sea Rim comprises the UK, The Nordics, Benelux and German-speaking Europe.

Arle’s portfolio currently comprises 13 European-headquartered businesses with an aggregate value of €3.2 billion. Arle’s approach is based on active ownership in close partnership with management in order to drive long term uplifts in growth and value and in turn to generate strong returns for Arle’s investors. For more information, please see http://www.arle.com.

ARLE CAPITAL PARTNERS LIMITED
12 Charles II Street London SW1Y 4QU, http://www.arle.com
T +44 (0) 20 7979 0000, E info(at)arle(dot)com
Registered in England No. 1517104 at the address shown VAT No. 108 2447 31
Authorised and regulated by the Financial Services Authority

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John Arney / Julie Foster

Lindsay Vetch / Christian Mahne
Vetch Mahne Ltd
+44 (0) 20 3488 3100
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