Global Investor

Global PE slowdown

Maulik Tewari | Updated on November 22, 2014 Published on April 20, 2014

The number of deals fell 11 per cent in 2013

The number of private equity (PE) buyouts was down 11 per cent globally in 2013, as per the Bain & Company Global Private Equity Report 2014. With markets on the rise, sellers’ price expectations exceeded what prospective buyers were willing to dish out. Buoyant equity markets and rising stock prices made PE deals pricier in 2013 and many prospective PE buyout candidates went the IPO way. For instance, SeaWorld Parks and Entertainment, owned by the Blackstone Group which was in talks with a PE acquirer finally chose to go for an IPO that raised about $ 4 billion. The total buyout deal value rose 22 per cent to $231 billion in 2013.

The $1.26 billion investment by Qatar Foundation in Bharti Airtel helped India post a 19 per cent growth in total deal value. But the deal count rose only 6 per cent to 150. Most involved capital infusions in exchange for minority stakes or private investments in listed companies.

However, total PE investment (buyouts and others) in the popular emerging Asian economies declined 20 per cent by value amid worsening macroeconomic conditions. In China, total deal value fell a sharp 38 per cent to $11.4 billion in 2013. While the deal count rose 16 per cent, most of these were small, early-stage investments. Baring’s $1.5 billion acquisition of Giant Interactive Group, an online game developer and operator, was the year’s biggest deal. Southeast Asia registered a fall in both deal value (down 21 per cent) and deal count (down 8 per cent).

In contrast, deal-making (buyouts) was up 36 per cent by value in Europe, but down 6 per cent by count.

In North America, excluding two big deals − publicly traded US-based computer maker Dell and food giant Heinz becoming private equity owned − PE buyouts fell 21-22 per cent.

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