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PE activity touches $13 Bn in May; down 75% year-on-year

Fund raising activity through private equity route witnessed an upsurge in May and touched $12,929 million, but is still 75% lower in value terms on year-on-year basis, a study says.

“May brought an encouraging 81% upsurge in the total value of private equity deals, which rose from $7,162 million to $12,929 million in just four weeks,” global deal tracking firm Zyphyr said.
This is despite the fact that the deal volume in May was significantly less than that in April, suggesting that there were more high value deals being signed off.
In May this year, only 172 deals were announced while in April the number was as high as 257.
Notwithstanding the surge in deal value is “still 75% lower year-on-year, against a less significant 52% drop in volume,” Zyphyr added.
A sector wise analysis shows that the services sector was the most frequently targeted but, given the large deal involving China Construction Bank, the banking segment accounted for a larger share of total value.
The largest deal in May by value was China Construction Bank’s 6% stake sale for $7,315 million.
The food, beverages and tobacco industry was buoyed by the Oriental Brewery buy out, which pushed the value of this segment almost 11 times higher to $1,809 million from $166 million in four weeks, the report added.
The top 10 countries in terms of value were China ($7,497 million), South Korea ($1,809 million), US ($1,535 million), Italy ($669 million), Bermunda ($500 million), Russia ($284 million), Netherlands ($228 million), UK ($106 million), France ( $68 million) and India ($63 million).
The second-placed deal also involved an Asian company and was Kohlberg Kravis Roberts’s $1,800 million buyout of the South Korean beer producer Oriental Brewery.
Some 40% of the top ten deals by value targeted US companies, while a UK-based firm was at the 14th place with Terra Firma’s $45 million purchase of the music producer EMI Group.
The US led the way by deal volume but slipped into third place by value as China crept to the forefront.
“The $7,497 million recorded for China was 71 times higher than the $105 million recorded in April 2009, while the US experienced a 72% decline in monetary terms from $5,579 million to $1,535 million,” the report added.
Source: Livemint

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