Mega Buyouts on the Horizon?


April 5, 2012

M&A dealmaking may be trending downwards, but some market observers are wondering if mega-buyouts are on the horizon. PE Hub noted that Coty’s USD 10 billion offer for Avon, and despite it not being a PE deal, the publication speculated that the transaction may signal the return of mega-sized LBOs due to the amount of debt involved. The PE Hub article says that there has not been a PE deal of that size since 2008.


Elsewhere, Zephyr analysts are thinking along the same lines. Its blog has an article analyzing February’s increase in PE deals. The author speculates that PE might be getting “second wind”, pointing out that after a “rather downbeat end to 2011”, when the value of deal making by the sector amounted to a less than impressive USD 13.15 billion, compared to 2011’s of USD 32.2 billion chalked up in July, and an even more worrying start to 2012, with a paltry USD 8.5 billion recorded in January, “the green shoots are putting in an appearance”, as figures soared to a “very healthy” USD 20.6 billion million last month.


Recent news from Reuters suggests that while the market has yet to deliver a USD 10 billion deal, there are indeed some large PE transactions underway, suggesting debt-financing is easing.

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