The European buy-out market has reached a record €80.2bn 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 are the most comprehensive compilation of pan-European data for 2004 and show that continental Europe has broken the €50bn mark for the first time, widening the growing chasm with the UK for the fourth consecutive year (value of the UK buy-out market in 2004 was €30.1bn). 

The number of deals completed in continental Europe also rose in 2004 with 587 completed compared to 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 1:1 is now approaching a 2:1 ratio as continental Europe continues to grow.  Much of this growth has been driven by significant investment from the big US players – US investment in European buy-outs has nearly trebled from €8bn in 2000 to over €21bn 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 €250m. Average deal value in Europe is €85m compared to €42m in the UK.”

Tom Lamb, Managing Director UK at Barclays Private Equity, added: “Germany, France and the Netherlands (with values of €18bn, €12bn and €7bn respectively) continue to lead the way in continental Europe but are still well behind the UK at €30bn.  Although the pan-European buy-out market grew by 23 per cent in 2004 and has increased by nearly 50 per cent 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 per cent 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 €50.2bn (compared to €30.1bn in UK), 20 per cent higher than the previous record in 2002 of €42.2 billion – total deal value has been greater than €40bn for three consecutive years
• There were 587 completions in 2004 (compared to 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 €80.2bn from 1,272 deals – a 23 per cent increase on 2003 when the buy-out market’s value reached €65.4bn from 1,273 deals (continental Europe and UK combined)
• The number of MBOs fell for the second consecutive year to 289, 12 per cent lower than 2003.  In contrast, MBI volume increased by a fifth from 246 in 2003 to 298
• MBO value also fell from €9.5bn in 2003 to €7.5bn in 2004.  MBI value rose significantly from €32.4bn to €42.6bn over the same period
• The number of €250m plus deals increased by 25 per cent last year, from 43 to 54.  This is the highest level to date
• 89 per cent of continental Europe buy-out value resulted from just 17 per cent 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. 

Ends

Notes to Editor:
The Centre for Management Buy-out Research (CMBOR) was founded by Barclays Private Equity and Deloitte at Nottingham University Business School in 1986.  CMBOR is world-renowned as the long-standing leader in providing robust analysis of the buy-out market.

Tom Lamb
Barclays Private Equity 
Tel: 020 7773 2541 / 07770 613 447

Mark Pacitti
Deloitte    
Tel: 020 7303 5871 / 07768 574 631

Emma Dag
Lawson Dodd   
Tel: 020 7535 1355 / 07801 657 536

Sorrelle Cooper
Deloitte   
Tel: 020 7303 4820 / 07932 078 218