This should come as no surprise: 2008 was not the easiest year for dealmaking. I know. It’s a hell of an understatement. According to the latest European Buyout Review (published by unquote”, in association with Bridgepoint), 2008 saw marked slowdown in buyout activity across Europe. To be expected, large deals were worst affected thanks to worsening economic conditions and rather desolate debt markets. The total value of buyouts for Europe in 2008 was just €73bn, a rather steep decline from the €184bn that 2007 saw. On the bright side, deal volume fell by only 30% to 572 transactions during the year that was.
Bridgepoint targets businesses valued at up to €1bn across six sectors including consumer, media and financial services. This vehicle will allow them to make equity investments of up to €350m on a single transaction.
Upon first glance the title of this article might make one think that times have gotten so tough that virtues are now being forced to consolidate with deadly sins (I’m sure there are some “brilliant” consultants and analysts out there that could extol the possible synergies of such a deal). However, the article pertains to former Bridgepoint portfolio company Faith Shoes being acquired by John Kinnaird and distressed company investment fund Agilo. Under the terms of the agreement, Faith will be combined with men’s clothing firm Envy, currently owned by Kinnaird and teenage fashion business Chilli Pepper, owned by Agilo.
While private equity conditions are beginning to dethaw in Europe, a couple of big names have decided to hold off planned auctions. Blackstone was looking to sell French healthcare provider Groupe Vitalia, and Bridgepoint had hopes of unloading debt collection business 1st Credit Ltd., but neither were getting the bites they were hoping for. Both Vitalia and 1st Credit are in interesting sectors so good things should come to those who wait. Plus, in Europe everything from right before the August holidays gets a going over again in September, so as markets make it past the one year anniversary of the credit crunch these deals will be looked at again in the fall.