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17:18 July 9th, 2007

LBOs provide fireworks for Fourth of July

Posted by: Jonathan Keehner
Tags: Uncategorized

firework.jpgIf your Fourth of July week felt more like a five-day pyrotechnics display you can thank private equity — which this year celebrated our nations birthday with a buyout blitz.

Of a staggering $64 billion announced in deals targeting U.S. companies last week, nearly three-quarters were backed by private equity, according to Dealogic. To put these LBO fireworks in perspective, just $11 billion in deals were announced last year during the holiday week — of which only 7 percent was private equity driven. And in 2005 private equity backed 9 percent of the $18 billion in U.S.-targeted M&A announced during the first week of July.

The Dealogic stats are below.

The private equity onslaught — which accounts for over a third of all U.S.-targeted M&A announced so far this year — means deals are much bigger than in past: last week Blackstone agreed to acquire Hilton Hotels for over $27 billion, including debt, while Carlyle offered to shell out more than $6 billion for Manor Care.

It also means that until the buyout boom finally subsides, those on Wall Street may want to rethink Labor Day plans.

Announced US targets - 1st week July
Year Value ($mm) Number PE backed ($)
2003 15,979.7 159 11%
2004 8,631.0 147 32%
2005 18,196.3 139 9%
2006 10,580.1 77 7%
2007 64,115.8 81 71%

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