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Equity in Review
Full-year 2009 edition
Contents
Foreword 3
Buyout and exit deal trends 4
North American private equity deals 9
Private equity activity tables - buyouts 11
Private equity activity tables - exits 12
Financial advisor activity tables - buyouts 13
Financial advisor activity tables - exits 14
Legal advisor activity tables - buyouts 15
Legal advisor activity tables - exits 16
Appendix 17
Notes and contacts 19
Private equity activity in North America has declined considerably announced US$13.9bn buyout of IndyMac Federal Bank FSB by
since 2008, as is to be expected while the region continues to private equity-backed OneWest Bank FSB accounts for more than
grapple with economic uncertainty, unfavorable valuations and an half of H1 2009 buyout value, while H2 2009 aggregate deal value is
unusually difficult financing climate. In 2009, buyouts fell 36% in more evenly spread across several large-cap deals.
volume and 34% in value from the previous year, with 461 buyouts
worth US$50.6bn in 2009, compared to 720 worth US$77.2bn Exit activity was even more resilient over the course of 2009,
in 2008. Exit activity also dropped dramatically over this period, increasing from 136 exits worth US$8.7bn in H1 2009 to 175 worth
with 311 exits worth US$30.1bn, a 28% decrease in volume and US$21.4bn in H2 2009, marking a 29% increase in volume and a
a 23% decrease in value from the 432 exits worth US$23.3bn an- remarkable 146% increase in value.
nounced in 2008.
We hope you find North American Private Equity in Review
At face value, these figures paint a rather bleak picture of the cur- both interesting and informative, and as always, we welcome
rent private equity market. A closer look, however, reveals a grad- your feedback.
ual increase in deal volume with each quarter of 2009, allowing
for a more promising second-half of the year. Buyouts increased
from 219 worth US$23.3bn in H1 2009 to 242 worth US$27.3bn in
H2 2009—a slight but significant increase given that more than H1
2009 buyout value depends heavily on a single deal. The March-
200
200
Volume of deals
150
150
100
100
50
50
0
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2004 2004 2004 2004 2004 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009
2 0 0 , 0 0
200,000 0
Value of deals (US$m)
1 5 0 , 0 0
150,000 0
1 0 0 , 0 0
100,000 0
5
50,000
0 , 0 0 0
0
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2004 2004 2004 2004 2004 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009
Key sectors boost aggregate deal values when Florida-based BankUnited was acquired by a group of buyout
Private equity activity in North America throughout 2009 often firms including The Carlyle Group, W.L. Ross & Co, Blackstone
mirrored major developments in the region’s economy, with Group Holdings, Centerbridge Partners and East Rock Capital for
buyouts and exits in the Financial Services and Life Sciences & US$900m.
Healthcare sectors taking place against the backdrop of a struggling
banking industry and the rapidly consolidating healthcare system. The Life Sciences & Healthcare industry also produced several
significant transactions in 2009. In the second largest deal of
Financial Services sector buyouts have a strong presence amongst 2009, announced in November, a group of funds managed by TPG
the year’s largest private equity deals: 32.3% of total buyout value Capital and the CPP Investment Board acquired IMS Health for
attributed to the space, where deals generally stemmed from US$5.1bn. But it was exit activity that truly took center stage as
US banks. The largest buyout of the year was that of IndyMac strategic bidders looked to private equity portfolios for acquisi-
Federal Bank FSB, when OneWest Bank FSB announced in March tion targets. Indeed, although the industry represents just 2.5%
its US$13.9bn acquisition of the bank backed by a consortium of of 2009 aggregate buyout value, it generated five of the top 20
private equity investors led by US-based J.C. Flowers & Co. May largest private equity transactions, most of which were exits, and
generated another, smaller private equity-backed bank bailout represents an impressive 37.9% of aggregate exit value for 2009.
12.2% 20.4%
22.8%
In the fourth largest private equity transaction of the year, ent for US$785m, in line with its efforts to strengthen its global
Blackstone Group Holdings sold US-based dermatology presence. Acclarent was sold by a group of investors including
specialist Stiefel Laboratories to UK-based healthcare Delphi Ventures, Johnson & Johnson Development Corporation,
group GlaxoSmithKline Plc for US$3.3bn, in a deal driven Meritech Capital Partners LP, New Enterprise Associates and
by GlaxoSmithKline’s efforts to grow and diversify its own Versant Ventures.
dermatology businesses.
Volume tells a different story
In February, another private equity exit resulted from the expan- Financial Services and Life Sciences & Healthcare may have
sion plans of a foreign strategic bidder. In this case, US-based the upper hand in terms of value this year, but in terms of
private equity firm GTCR Golder Rauner sold Ovation Pharma- volume, buyouts and exits were generally concentrated in other
ceuticals (since remaned Lundbeck Inc.), to Denmark-based H. industries: Industrials, Chemicals & Engineering and Technol-
Lundbeck A/S, for US$900m. The deal was aimed at building ogy, Media (TMT) and Telecommunications industries repre-
Lundbeck’s presence in the US, and at expanding its pipeline sent 21.3% and 15.8% of the year’s total buyouts, respectively.
and its existing portfolio of products. The end of the year saw Putting things in perspective, buyout activity in the Financial
yet another Life Sciences & Healthcare exit driven by strategic Services sector is low by comparison, accounting for just 6.3%
buyers’ appetite for growth when Ethicon Inc. purchased Acclar- of aggregate buyout volume.
< US$15m
< US$15m US$15m - US$100m
US$15m - US$100m
450,000
4 5 0 ,0 0 0
US$101m - US$250m
1,000
1,000
US$101m - US$250m US$251m - US$500m
400,000
4 0 0 ,0 0 0
300,000
3 0 0 ,0 0 0
600
600 250,000
2 5 0 ,0 0 0
200,000
2 0 0 ,0 0 0
400
400
150,000
1 5 0 ,0 0 0
100,000
1 0 0 ,0 0 0
200
200
50,000
5 0 ,0 0 0
00 0 0
2004
2004 2005
2005 2006
2006 2007
2007 2008
2008 2009
2009 2004
2004
2005
2005
2006
2006
2007
2007
2008
2008
2009
2009
600 1 2 0 ,0 0 0
> US$500m
Volume of deals
500
500
100,000
1 0 0 ,0 0 0
400
400
80,000
8 0 ,0 0 0
300
300
60,000
6 0 ,0 0 0
200
200 40,000
4 0 ,0 0 0
100
100 20,000
2 0 ,0 0 0
00 0 0
2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009
2004 2005 2006 2007 2008 2009
2004 2005 2006 2007 2008 2009
Consumer industry buyouts were also relatively high in volume tal private equity exits announced this year, more than triple that
this year, representing 15% of total buyout volume, as were buy- of other sectors. Business Services and Life Sciences & Health-
outs in the Business Services space, which follows closely behind care exits each represent 13.7% of total exit volume for 2009.
with 14.1%. Buyout volume elsewhere is somewhat evenly spread
across the Life Sciences & Healthcare, Energy, Mining, Oil & Gas, A closer look at deal values
and Financial Services industries. In the half-year edition of this report, multi-billion dollar trans-
actions were few and far between: the only three deals to break
Exits, meanwhile, were particularly prominent in the TMT sector. the US$1bn mark were the US$13.9bn acquisition of IndyMac
Just as Financial Services saw high deal values but a relatively Federal Bank FSB by private equity-backed One West Bank FSB,
low deal volume, the Life Sciences & Healthcare industry, a hub the US$4.4bn acquisition of Barclays’ iShares by CVC Capital
for large-cap exits, is actually outpaced by other sectors in terms Partners affiliate Blue Sparkle LP and Blackstone Group Hold-
of aggregate exit volume. The TMT sector represents 42.5% of to- ings’ US$3.3bn exit from Stiefel Laboratories, which was sold to
GlaxoSmithKline plc. The second half of 2009, however, pro- Merrill Lynch, Barclays Capital Inc., UBS Investment Bank and
duced triple this amount, with nine buyouts exceeding US$1bn KeyBanc Capital Markets.
announced in this period. A closer look at this select group of
deals reveals that financing packages played a major role in The financing for the acquisition of TASC, while not completely
boosting deal values across the board. disclosed, also involved major global banks, with financing
provided by Barclays Capital, Deutsche Bank Securities, RBC
In the fifth largest deal of 2009, for example, Blackstone Capital Capital Markets and CPPIB Credit Investments Inc. The financ-
Partners V LP, a fund managed by US-based private equity firm ing consisted of senior secured credit facilities and senior sub-
Blackstone, announced its US$2.3bn acquisition of SeaWorld ordinated notes, arranged by an affiliate of KKR and Highbridge
Parks & Entertainment from Anheuser-Busch InBev. Black- Mezzanine Partners.
stone provided US$1bn in equity financing, but a substantial
portion of the deal, which was announced in early October, was Lucrative Financial Services opportunities
financed with debt. In addition to a US$100m revolving credit boost deal value further
facility, backing the transaction with US$950m in senior credit The Financial Services sector was clearly quite appealing to
facilities were Bank of America Merrill Lynch, Barclays Capital, financial buyers this year, as evidenced by the various private
Deutsche Bank, Goldman Sachs, and Mizuho Corporate Bank, equity groups that bid either individually or collectively for
while an additional US$450m in mezzanine financing came from a diverse group of targets in the industry. Zooming in on a
Goldman Sachs and GSO Capital Partners, a division handful of these deals, it seems many were made possible
of Blackstone. by specific agreements that allowed private equity firms to
make investments with relatively low levels of risk, and by the
Another Leisure industry deal emerged the following December, wealth of opportunities resulting from sellers’ need to divest
when Apollo Management announced its plans to acquire US- non-core assets.
based Cedar Fair LP, a regional amusement park operator and
hotel owner, for US$2.2bn. The implied equity value of the deal In the largest buyout of 2009, a consortium of investors including
totaled US$635m, which pales in comparison to the US$1.95bn JC Flowers & Co LLC, MSD Capital LP and Stone Point Capital
financing commitment from affiliates of J.P. Morgan, BofA LLC, among others, formed IMB HoldCo, a holding company of
14,000
14,000
Value of deals (US$m)
50
50
12,000
12,000
Volume of deals
40
40
10,000
10,000
30
30 8,000
8,000
6,000
6,000
20
20
4,000
4,000
10
10
2,000
2,000
00 00
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009
OneWest Bank FSB, to acquire IndyMac Federal Bank FSB for After a competitive auction process, iShares ultimately ended
US$13.9bn. Under the terms of the agreement, OneWest agreed up in the hands of strategic bidder BlackRock, which included
to purchase US$20.7bn of assets at a discount of US$4.7bn and the business in its US$13.7bn acquisition of Barclays Global
to assume all of the target bank’s deposits. The deal also includ- Investors in June and agreed to pay CVC Capital Partners a
ed a US$16bn loan portfolio which on the surface seems like the US$175n termination fee. The proposed deal nevertheless takes
riskiest portion of the deal, but much of the potential risk was its place among several other bank divestitures announced
absorbed by loss-sharing agreements on the part of the Federal during 2009, such as Bank of America’s (BOA) sale of US-based
Deposit Insurance Corporation (FDIC). In this case, the FDIC bank and wealth management business First Republic Bank.
agreed to share losses on a portfolio of qualifying loans, with In October, US-based private equity firms General Atlantic LLC,
the new IndyMac assuming the first 20% of losses after which Colony Capital LLC, and Sequoia Capital backed the US$1bn
the FDIC will share losses 80/20 for the next 10% of losses and management buyout of the bank, which BOA divested as part of
95/5 thereafter. The FDIC also entered into a loss-share transac- its strategy of shedding non-core operations. Up until the deal’s
tion with BankUnited, which in May was acquired by a group of announcement, the unit received interest from other high-profile
private equity firms for US$900m. Under the terms of the agree- private equity firms, including The Carlyle Group, Blackstone
ment, the FDIC will share losses of roughly US$10.7bn in assets. Group and TPG Capital.
In other Financial Services deals, trying times for US banks Outlook for 2010
translated into asset sales, and private equity firms were quick The economic uncertainty overshadowing much of 2009 seems
to capitalize on the opportunity to purchase particularly attrac- to be dissipating as the private equity industry moves into a
tive operations. In April, for example, UK-based Barclays plc new decade. With buyouts and exits increasing steadily with
announced it would sell its exchange traded funds unit, iShares, each passing quarter, there is good cause for optimism going
to CVC Capital Partners affiliate company Blue Sparkle, while forward. Additionally, signs of life in the debt financing markets,
Fifth Third Bank sold a 51% stake in Fifth Third Processing which had been virtually inaccessible during the worst phases
Solutions—a Business Services company—to international of the economic downturn, suggest an even higher volume of
private equity firm Advent International Corporation for US$1.8bn. larger deals could emerge in the upcoming months.
2 Nov-05-09 P IMS Health Life Sciences IMS Health A consortium formed with investment IBO 5,276
& Healthcare Consortium funds managed by TPG Capital and the
CPP Investment Board.
3 Apr-09-09 L Barclays Financial Blue Sparkle LP UK based affiliate of CVC Capital Part- Barclays plc IBO 4,404
(iShares Services ners Group SICAV-FIS S.A.
exchange traded
funds business)
4 Apr-20-09 C Stiefel Life Sciences GlaxoSmithKline Plc UK based healthcare group Blackstone Group Exit 3,300
Laboratories & Healthcare Holdings LLC
5 Oct-07-09 C SeaWorld Parks Leisure Blackstone Capital US based private equity fund of Anheuser-Busch IBO 2,300
& Entertainment Partners V LP The Blackstone Group InBev
6 Dec-16-09 P Cedar Fair LP Leisure Apollo Management US based private equity IBO 2,179
LP
7 Mar-30-09 C Fifth Third Business Advent International US based private equity firm Fifth Third Bank IBI 1,811
Processing Services Corporation
Solutions LLC
(51% stake)
8 Nov-08-09 C TASC TMT General Atlantic US based private equity firm Northrop MBO 1,650
LLC; Kohlberg Kravis Grumman
Roberts & Co Corporation
9 Aug-10-09 C Dynegy (five Energy, LS Power Group US based private equity firm Dynegy Inc IBI 1,498
peaking and Mining, Oil
three combined- & Gas
cycle generation
assets)
10 Nov-19-09 C Birds Eye Foods Consumer Pinnacle Foods US manufacturer of branded food Pro-Fac Cooperative Exit 1,300
Group Inc products Inc; Vestar Capital
Partners Inc
11 Sep-23-09 P SkyTerra Com- TMT Sol Private Corp. US based new corporation formed and IBI 1,206
munications indirectly wholly-owned by Harbinger
(51% stake) Capital Partners Master Fund I, Ltd and
Harbinger Capital Partners Special Situ-
ations Fund, L.P., the US based funds
12 Jul-22-09 C Zappos.com Consumer Amazon.com Inc US based company Sequoia Capital; Exit 1,134
Venture Frogs, LLC
13 Oct-21-09 P First Republic Financial Colony Capital LLC; US based private equity firm MBO 1,000
Bank Services General Atlantic LLC ;
Sequoia Capital
14 May-21-09 C BankUnited FSB Financial Blackstone Group US based private equity firms MBI 900
Services Holdings LLC, The
Carlyle Group LLC,
Centerbridge Partners
L P, W.L. Ross & Co
LLC, East Rock Capital
LLC,
15 Feb-09-09 C Lundbeck Life Sciences H. Lundbeck A/S Denmark based pharmaceutical GTCR Golder Rauner Exit 900
& Healthcare company LLC
16 Dec-16-09 C Acclarent Life Sciences Ethicon Inc US based medical device company Delphi Ventures; Exit 785
& Healthcare Johnson & Johnson
Development
Corporation; Meritech
Capital Partners LP;
New Enterprise
Associates;
Versant Ventures
17 Sep-25-09 C Simmons Bed- Consumer Ares Management US based private equity firm; Canada IBO 760
ding Company LLC; Ontario Teachers based pension plan and investment
Pension Plan group
18 Nov-09-09 P AdMob TMT Google Inc US based company operating web search Accel Partners & Co Exit 750
engines Inc; Draper Fisher
Jurvetson; Northgate
Capital; Sequoia
Capital
19 Feb-23-09 C CoreValve Life Sciences Medtronic Inc US based manufacturer and supplier of Apax Partners LLP; Exit 700
& Healthcare medical devices HealthCap; Maverick
Capital Ltd; Sofinnova
Partners
20 Nov-13-09 C United Malt Agriculture GrainCorp Limited Australia based handler and supplier of Castle Harlan Inc; Exit 674
Holdings LP agriproducts and bulk products CHAMP Private Equity
Note: The tables are based on private equity houses as the bidder on buyouts and buyins announced between 01/01/2009 and 12/31/2009, where the target is US and Canada, excluding lapsed and withdrawn deals.
The Private Equity Activity Tables reflect the activity of buyout firms, venture capitalists, investment firms, financial institutions and all parties whose activities wholly involve, or lude making private equity
investments. Please note that the values in the ‘Value’ column do NOT reflect the equity contribution of the investors but represent the total values of deals they were involved in.
Note: The tables are based on private equity houses as the seller on exits announced between 01/01/2009 and 12/31/2009, where the target is US and Canada, excluding lapsed and withdrawn deals.
The Private Equity Activity Tables reflect the activity of buyout firms, venture capitalists, investment firms, financial institutions and all parties whose activities wholly involve, or include making private equity
investments. Please note that the values in the ‘Value’ column do NOT reflect the equity contribution of the investors but represent the total values of deals they were involved in.
Note: The tables are based on financial advisors to the bidder on buyouts and buyins announced between 01/01/2009 and 12/31/2009, where the target is US and Canada, excluding lapsed and withdrawn deals.
14 Bank of America Merrill Lynch 691 3 14 Royal Bank of Scotland Group 674 1
16 Raymond James & Associates 170 3 16 Robert W. Baird & Co. 517 3
Note: The tables are based on financial advisors to the seller/target on exits announced between 01/01/2008 and 12/31/2008, where the target is US and Canada, excluding lapsed and withdrawn deals.
Note: The tables are based on law firms advising the bidder on buyouts and buyins announced between 01/01/2009 and 12/31/2009, where the target is US and Canada, including lapsed and withdrawn deals.
14 Willkie Farr & Gallagher 3,557 5 14 Davis Polk & Wardwell 1,134 1
Buyout Deal Size Data by Volume Exit Deal Size Data by Volume
2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009
Not disclosed 257 359 433 522 429 264 Not disclosed 96 159 223 277 191 151
US$15m - US$100m 170 172 193 159 121 102 US$15m - US$100m 122 146 188 143 99 71
TOTAL 677 762 938 1,002 720 463 TOTAL 393 532 683 709 432 313
Buyout Deal Size Data by Value Exit Deal Size Data by Value
Value 2004 2005 2006 2007 2008 2009 Value 2004 2005 2006 2007 2008 2009
< US$15m 376 307 587 328 323 311 < US$15m 225 214 341 337 229 278
US$15m - US$100m 8,269 9,049 9,359 7,954 5,931 4,607 US$15m - US$100m 6,273 7,734 9,782 7,913 5,503 2,977
US$101m - US$250m 15,868 13,808 14,172 16,415 10,483 4,934 US$101m - US$250m 11,753 14,912 18,550 16,400 9,786 4,557
US$251m - US$500m 18,808 18,133 19,024 23,275 15,521 5,531 US$251m - US$500m 15,950 21,267 22,261 28,692 11,597 7,786
> US$500m 96,024 110,909 392,158 390,902 44,986 35,419 > US$500m 77,650 83,344 75,193 94,137 65,690 16,996
TOTAL 139,345 152,206 435,300 438,874 77,244 50,800 TOTAL 111,851 127,471 126,127 147,479 92,805 32,593
• Deals are included within the analysis, charts and graphs for Remark
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