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AltAssets is the private equity news and research service from Almeida Capital
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PRINT THIS PAGE Buy-and-build activity reaches record levels in 2007, study22/02/2008. Source: AltAssets. 
Last year saw a record number of 385 follow-on acquisitions by private equity-backed businesses, according to ten year study on the buy-and-build strategies of private equity-owned portfolio companies in Europe, released by mid-market private equity firm PPM Capital in conjunction with Mergermarket. The 385 transactions in 2007 represent more than a ten-fold increase on the 33 deals completed in 2000. The number of transactions also represents a significant increase on the 339 deals completed in 2006.
The transactions included restaurant group Tragus acquiring Ma Patter's and Strada, and leisure group Merlin Entertainment's purchase of Madame Tussauds to add to its Gardaland, Aquatica and Legoland acquisitions.
Neil MacDougall, managing partner of PPM Capital, said 'We have seen the continued growth of buy-and-build strategies in recent years, with 2007 representing a peak in both the volume and speed of follow-on investments by private equity-backed portfolio companies. Undoubtedly some of this simply reflects the strong M&A market in the first half of last year, but given the current debt market conditions, we predict that 2008 will be the year of focus on portfolio companies generally.
'If private equity firms are to continue to achieve their target returns in turbulent times they will need to concentrate on creating value within their portfolio companies by using their expertise to manage and grow those businesses. One of the key ways to do this is via a buy and build strategy,' he added.
Copyright © 2008 AltAssets
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