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 October 25, 2017
 Written by Melissa Singh, Dealogic Research

Average deal size of private equity-backed LBOs breach $1bn for the first time.

Private equity-backed LBOs highest since 2007

A decade after the financial crisis rocked the global economy, private equity (PE) firms have adapted to the recovering landscape. Historically low interest rates created opportunity for PE firms looking to buy. Investors seeking high returns have put capital into riskier securities, and financial sponsors are tapping into these pools. Global financial sponsor–backed LBO volume grew to $252.7bn this YTD, the highest YTD level since pre-crisis 2007 ($564.8bn).


   private equity backed LBO volume_chart

Dry powder lights up billion-dollar deals

Sponsor–backed LBOs decline to the lowest activity in over a decade, while average deal size is at a historic high. The average global LBO breached $1bn for the first time on record, topping the $904m set in 2007. Successful fundraising and years of striking smaller deals have led sponsors to spend record levels of undeployed capital “dry powder”, ultimately leading to some of the biggest deals since the financial crisis. Japan-targeted LBO volume set the all-time record of $24.1bn this YTD, driven by Toshiba Memory and sponsor Bain Capital. Sponsors have also looked to a variety of sectors for potential targets, leading to the $6.7bn acquisition of office-supply retailer Staples by PE firm Sycamore Partners, and the $6.4bn buyout of telecom operator Nets A/S, led by PE firm Hellman & Friedman.


Top Leveraged Buyouts Announced YTD
 Pos.  Target Acquiring FS / Private Equity   Value  Date 
  1 Toshiba Memory Bain Capital  $17.9bn Sep 20
  2 Calpine CPPIB; Energy Capital Partners  $17.4bn Aug 18
  3 Global Logistic Prop Hopu Investment Mgmt  $16.0bn Jul 14
  4 Staples Sycamore Partners  $6.8bn Jun 28
  5 Nets A/S GIC Special Invest; Advent Intl; Hellman & Friedman; Bain Capital; StepStone  $6.4bn Sep 25
  6 Banco Popular Esp Blackstone Grp  $6.0bn Aug 8
  7 Belle Intl CDH China Holdings Mgmt  $5.8bn Apr 28
  8 Parexel Intl Pamplona Capital Mgmt  $5.0bn Jun 20
  9 West Corp Thomas H Lee Partners; Quadrangle Grp; Apollo Global Mgmt  $4.9bn May 9
  10 Aon Hewitt Blackstone Grp  $4.8bn Feb 10


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Data source: Dealogic, as of October 23, 2017