Private equity: Searching for strategies
Private equity deal activity was under pressure in the first half of the year, as the high yield debt market went into a tailspin and banks hesitated to support leveraged buyouts. “For a good portion of the first and early second quarter, there was almost no debt available,” says Oliver Brahmst, a partner at White & Case. “As a consequence, the beginning of this year saw a pretty big drop in activity.” The number of private equity buyouts declined 8.4 percent in H1 2016 year-on-year, though deal values increased slightly from US$62.8 billion to US$74.3 billion. The decline in private equity exits was slightly less pronounced, with just 423 deals in the first half of 2016, compared with 448 during the same period in 2015. However, exit values dropped 11 percent to US$99.7 billion. In terms of sectors, there is still appetite for PE deals in areas such as PMB and TMT. The biggest first-quarter exit involved computer services group Dell’s acquisition by NTT DATA Corp. for US$3.1 billion. In another large H1 2016 deal with a PE component, medical supplies maker Sage Products was sold in February by PE firm Madison Dearborn Partners to medical technology company Stryker Corp. for US$2.78 billion.
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The volume of private equity buyouts dropped 8.4 percent in H1 2016 year-on-year Deal values increased from US$62.8 billion to US$74.3 billion Private equity exits were down 5.6 percent in in H1 2016 year-on-year
Exit values dropped 11 percent to US$99.7 billion