With the credit markets as barren as a lunar landscape at the moment, the buyout markets (particularly on the large scale) have slowed. Year-to-date thus far, global buyout activity has plunged 74% compared to last year to a four-year low of $180 billion.
Deal volume has decreased most sharply in the United States, with an 83.5% decline year-to-date to $61.8 billion. Volume in Europe fell 61% to $70.7 billion and in Asia deals fell 25% to $18.8 billion. The rest of the world totaled $29.8 billion.
Even with these down figures, those that say that buyouts are a thing of the past though are seriously delusional. Smaller deals are getting done and financing has gotten more creative as many have put the current cap of debt financing for a deal at $2 billion. Once the debt markets pick up again (and they will!) the large deals will return just as they did when things sorted themselves out after the junk bond market collapse two decades ago. Private Equity firms won’t sit on the sidelines forever.