London, March 28, 2005 — The European buy-out market reached a record €80.2 billion in 2004, according to the Centre for Management Buy-Out Research (CMBOR), Europe's pre-eminent provider of analysis on the UK and European buy-out market.

Sponsored by Barclays Private Equity and Deloitte, the figures (See PDF file attachments below) are the most comprehensive compilation of pan-European data for 2004 and show that continental Europe has broken the €50 billion mark for the first time, widening the growing chasm with the UK buy-out market (€30.1 billion in 2004) for the fourth consecutive year.

The number of deals completed in continental Europe also rose in 2004, with 587 completed compared with 574 in 2003. This increase went some way to balancing out the fall in UK completions — from 699 in 2004 to 685 in 2003. The total number of pan-European deals in 2004 stood at 1,272.

Mark Pacitti, Corporate Finance Partner at Deloitte, comments: "The huge leap made in the European buy-out market in 2004 shows that continental Europe is maturing. The traditional benchmark ratio of continental Europe to UK being 1-to-1 is now approaching a 2-to-1 ratio as continental Europe continues to grow. Much of this growth has been driven by significant investment from the big U.S. players — U.S. investment in European buy-outs has nearly trebled from €8 billion in 2000 to over €21 billion in 2004. European deals also tend to be larger than the UK, with 76 per cent of total deal value coming from deals in excess of €250 million. Average deal value in Europe is €85 million compared to €42 million in the UK."

Tom Lamb, Managing Director UK at Barclays Private Equity, added: "Germany, France and the Netherlands (with values of €18 billion, €12 billion and €7 billion, respectively) continue to lead the way in continental Europe but are still well behind the UK at €30 billion. Although the pan-European buy-out market grew by 23 percent in 2004 and has increased by nearly 50 percent in the last three years, it is clear there still remains scope for substantial growth when you look at the analysis of buy-out value as a proportion of GDP.

"The UK stands at 1.8 percent whereas the buy-out markets in all the other countries (with the exception of the Netherlands) are less than half of this. This suggests that the continental European buy-out market could easily double in size over the coming years."

Continental Europe: Key findings:

• Total deal value for 2004 was €50.2 billion (compared with €30.1 billion in the UK), 20 percent higher than the previous record in 2002 of €42.2 billion – total deal value has been greater than €40 billion for three consecutive years;
• There were 587 completions in 2004 (compared with 685 in UK), 11 more than the previous year and the highest ever recorded;
• Total value of buy-outs across continental Europe and the UK combined in 2004 was €80.2 billion from 1,272 deals – a 23 percent increase on 2003 when the buy-out market's value reached €65.4 billion from 1,273 deals (continental Europe and UK combined);
• The number of MBOs fell for the second consecutive year to 289, 12 percent lower than 2003. In contrast, MBI volume increased by a fifth from 246 in 2003 to 298;
• MBO value also fell from €9.5 billion in 2003 to €7.5 billion in 2004. MBI value rose significantly from €32.4 billion to €42.6 billion over the same period;
• The number of €250 million plus deals increased by 25 percent last year, from 43 to 54. This is the highest level to date.
• 89 percent of continental Europe buy-out value resulted from just 17 percent of deals in 2004.

Unless otherwise stated, the figures reported are for continental Europe. When pan-Europe is mentioned, this refers to combined figures for continental Europe and the UK. Complete results may be found in the PDF file attachments below. 

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