When less is more

2년전만해도 250억 기업 매수는 상상하기도 힘들었으나, 이번주 Sallie Mae나 Bell Canada enterprise와 같은 회사들이 인수되었다.

그런데 전체적인 deal의 수는 줄면서 기업 매수 대금은 비슷한 수준인 것으로 보아 deal은 점점 커지고 있어서, 이제 거대 기업 매수는 trend화 되어 가는 것 같다. 거기다가 인식도 많이 좋아져서, 기업 구조 개선에 많은 도움을 주는 것으로 바뀌어 간다.

 

Mid-sized private-equity deals

When less is more

Apr 19th 2007
From The Economist print edition

Despite recent big splashes, most private-equity deals are modest and friendly

HEADS barely turn these days at the size of private-equity transactions. Two years ago, a $25 billion buy-out of any company would have been hard to imagine. Yet either Sallie Mae or Bell Canada Enterprises, both approached this week, could fetch that.

 

But what happens in the underbelly of the business world, where deals are done away from the glare of publicity, and are far smaller in size? Here activity is just as brisk and, as with the megadeals, competition is heating up.

 

Dealogic, a data gatherer, tracked 1,294 buy-out deals of less than $500m last year, about three-quarters of which were under $100m. That is up from 752 in 2004 (see chart). By contrast, there were 243 buy-outs of more than $500m, up from 131 two years earlier.

Although smaller deals involve much less debt than the bigger ones, the amount of leverage iscreeping up. Some in the industry blame over-eager lenders. “The banks have a voracious appetite for repeating their sins of the past, which is lending too much money,” says Jay Jordan of Jordan Industries, a long-time investor in small and middle-market firms. But for every lender, there is also a borrower, encouraged to bet heavily by the record of private-equity deals. Research released recently by Towers Perrin, a consultancy, found that although buy-outs of more than $1.5 billion register a strong performance six months after a deal (outperforming all mergers and acquisitions by 13.8%), that edge is trimmed to just 1.1% after 18 months. It found mid-market deals outperformed others by about 7% over an 18-month period.

Private-equity firms focusing on the mid-market face their own challenges, however. As competition grows, prices are rising. The competition is being fuelled, in part, by the increased use of “auctions” in which an intermediary (often an investment bank) attracts numerous potential buyers with the goal of squeezing a higher price for the seller. This forces mid-market firms to build their own sourcing networks, and to become more specialised.The good news is that, as the private-equity industry becomes better known, more small companies, including family-owned firms, turn to it for capital and advice. For an industry that has received a lot of unwelcome attention recently, it is nice to be wanted by someone.

 

[2007/04/19] Mid-sized private-equity deals: When less is more ★

creep up 서서히 조금씩 움직이다.