The Global Economic Impact of Private Equity Report 2008 - World ...

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TablesTable 2: Magnitude and growth of LBO activityTable 2B: LBO transactions by regionNumber of dealsFinancial No financial % with All LBOsponsor sponsor sponsor transactions % of world totalN N N Whole period 1970-2000 2001-2007United States 8,031 1,628 83.1% 9,659 45.1% 55.1% 34.8%Canada 334 137 70.9% 471 2.2% 1.5% 3.5%Continental Europe 3,920 699 84.9% 4,619 21.6% 15.6% 17.6%Scandinavia 829 140 85.6% 969 4.5% 3.1% 3.6%United Kingdom 2,889 1,137 71.8% 4,026 18.8% 20.1% 28.7%Africa and Middle East 180 104 63.4% 284 1.3% 0.7% 2.8%Asia 398 110 78.3% 508 2.4% 1.5% 2.8%Australia 183 95 65.8% 278 1.3% 0.5% 2.5%Eastern Europe 296 93 76.1% 389 1.8% 1.1% 2.5%Latin America 143 51 73.7% 194 0.9% 0.8% 1.3%Total 17,203 4,194 80.4% 21,397Million USD (year 2007) amounts using imputed enterprise values (see Appendix I)Financial No financial % with All LBOsponsor sponsor sponsor transactions % of world total$ million $ million $ million Whole period 1970-2000 2001-2007United States 1,814,557 133,973 93.1% 1,948,530 49.7% 64.5% 42.8%Canada 76,448 4,980 93.9% 81,428 2.1% 1.5% 2.4%Continental Europe 819,626 44,587 94.8% 864,213 22.0% 13.2% 26.1%Scandinavia 128,298 20,324 86.3% 148,623 3.8% 2.3% 4.5%United Kingdom 539,385 62,247 89.7% 601,632 15.3% 15.0% 15.5%Africa and Middle East 24,777 13,328 65.0% 38,105 1.0% 0.3% 1.3%Asia 116,440 13,109 89.9% 129,549 3.3% 1.8% 4.0%Australia 36,070 2,365 93.8% 38,435 1.0% 0.3% 1.3%Eastern Europe 26,197 2,849 90.2% 29,045 0.7% 0.2% 1.0%Latin America 40,994 1,340 96.8% 42,334 1.1% 0.9% 1.2%Total 3,622,792 299,102 92.4% 3,921,894 100.0% 100.0% 100.0%16 Large-sample studies: DemographyThe Global Economic Impact of Private Equity Report 2008
Table 2: Magnitude and growth of LBO activityTable 2C: LBO transactions by industryDistribution of LBO transactions across 38 main industries, ordered by rank in %1970-1989 1990-1999 2000-2007 1970-2007 ChangeRetail 13.8 6.7 5.7 6.3 -8.1Software and internet 3.1 5.7 6.2 5.9 3.1Industrial machinery 5.6 5.8 5.8 5.8 0.1Advanced industrial equipment 7.6 6.1 5.0 5.4 -2.6Hotels, resorts and cruise lines, leisure facilities, restaurants 2.7 3.8 5.8 5.2 3.1Chemicals, industrial, and agricultural products,paper and forest products 7.6 5.8 4.7 5.1 -3.0Media, publishing, advertising 4.5 5.2 4.7 4.8 0.2Industrial and commercial services 2.3 4.0 4.7 4.4 2.4Other services 2.5 4.1 4.2 4.1 1.7Trading companies and distributors 4.2 4.1 4.1 4.1 -0.2Food, beverages, and tobacco 4.0 4.5 3.7 3.9 -0.2Financials 2.1 2.8 4.0 3.6 1.9Industrial and construction materials 4.9 3.3 3.5 3.5 -1.5Household non-durables 2.8 4.0 3.2 3.4 0.3Metals and mining, steel 4.0 3.6 2.9 3.2 -1.0Automotive 3.5 2.8 3.0 3.0 -0.5Transportation 2.7 2.2 2.8 2.7 0.1IT and data services 2.0 2.6 2.7 2.7 0.7Household durables 5.1 2.5 2.5 2.6 -2.5Construction and engineering 2.3 2.0 2.8 2.5 0.5Healthcare products and equipment 2.8 2.9 2.1 2.3 -0.7Healthcare services and providers 0.3 2.3 2.4 2.3 2.1Computer and telecommunications equipment 3.4 3.0 2.0 2.3 -1.4Biotech, pharmaceuticals, life sciences 0.8 2.3 1.5 1.7 0.7Multi-sector holdings and conglomerates 2.0 2.1 1.3 1.5 -0.7Infrastructure and utilities 0.4 0.7 1.8 1.5 1.4Real estate 0.3 0.7 1.7 1.4 1.4Education, human resource and employment services 0.7 1.3 1.5 1.4 0.7Energy 1.1 1.3 1.4 1.4 0.3Telecom 0.3 1.1 1.2 1.2 1.0Movies and entertainment 0.4 0.7 1.1 1.0 0.7Table 3: Size and pricing of LBO dealsTable 3A: By time periodEnterprise Value, 2007 USD Implied Enterprise Value/Revenues Implied Enterprise Value/EBITDAMean Median N Observed Mean Median N Observed Mean Median N Observed1970-1984 287.2 72.8 103 50% 0% 0%1985-1989 669.1 118.4 304 46% 0% 0%1990-1994 196.5 74.1 473 41% 0% 0%1995-1999 216.6 65.4 1,952 42% 2.0 1.0 223 5% 10.6 7.7 169 4%2000-2002 191.6 34.4 2,110 51% 1.7 0.7 380 9% 10.9 6.1 225 5%2003-2005 325.6 61.6 2,635 43% 1.7 0.9 695 11% 10.5 7.6 412 7%2006-2007 601.5 86.8 1,416 32% 3.0 1.1 626 14% 12.0 9.7 335 8%Table 3B: By LBO typeEnterprise Value, 2007 USD Implied Enterprise Value/Revenues Implied Enterprise Value/EBITDAMean Median N Observed Mean Median N Observed Mean Median N ObservedPublic to private 872.0 174.0 1,224 87% 2.8 1.0 881 63% 11.2 7.8 761 54%Private to private 140.3 35.5 3,076 31% 1.8 0.9 245 2% 11.6 6.5 84 1%Divisional 274.1 54.0 3,307 49% 2.5 0.7 473 7% 9.4 8.1 120 2%Financial vendor 376.2 160.1 1,115 40% 1.9 1.2 291 11% 10.8 9.4 161 6%Distressed 139.4 29.8 271 52% 0.7 0.4 46 9% 13.6 12.1 16 3%Total 318.3 61.1 8,993 42% 2.4 0.9 1,936 9% 11.0 8.0 1,142 5%The Global Economic Impact of Private Equity Report 2008 Large-sample studies: Demography 17
Page 2 and 3: The Globalization of Alternative In
Page 5: ContributorsCo-editorsAnuradha Guru
Page 9 and 10: PrefaceKevin SteinbergChief Operati
Page 11 and 12: Letter on behalf of the Advisory Bo
Page 13 and 14: Executive summaryJosh lernerHarvard
Page 15 and 16: • Private equity-backed companies
Page 17 and 18: C. Indian casesThe two India cases,
Page 19 and 20: Part 1Large-sample studiesThe Globa
Page 21 and 22: The new demography of private equit
Page 23 and 24: among US publicly traded firms, it
Page 25 and 26: should be fairly complete. While th
Page 27 and 28: according to Moody’s (Hamilton et
Page 29 and 30: draining public markets of firms. I
Page 31 and 32: FIguresFigure 1A: LBO transactions
Page 33: TablesTable 1: Capital IQ 1980s cov
Page 37 and 38: Table 4: Exits of individual LBO tr
Page 39 and 40: Table 6: Determinants of exit succe
Page 41 and 42: Table 7: Ultimate staying power of
Page 43 and 44: Appendix 1: Imputed enterprise valu
Page 45 and 46: Private equity and long-run investm
Page 47 and 48: alternative names associated with t
Page 49 and 50: 4. Finally, we explore whether firm
Page 51 and 52: When we estimate these regressions,
Page 53 and 54: cutting back on the number of filin
Page 55 and 56: Table 1: Summary statisticsPanel D:
Page 57 and 58: Table 4: Relative citation intensit
Page 59 and 60: figuresFigure 1: Number of private
Page 61 and 62: Private equity and employment*steve
Page 63 and 64: Especially when taken together, our
Page 65 and 66: centred on the transaction year ide
Page 67 and 68: and Vartia 1985.) Aggregate employm
Page 69 and 70: sectors. In Retail Trade, the cumul
Page 71 and 72: employment-weighted acquisition rat
Page 73 and 74: FIguresFigure 1: Matches of private
Page 75 and 76: Figure 6:Figure 6A: Comparison of n
Page 77 and 78: Figure 8:Figure 8A: Comparison of j
Page 79 and 80: Figure 11: Variation in impact in e
Page 81 and 82: Figure 12: Differences in impact on
Page 83 and 84: Private equity and corporate govern
Page 85 and 86:
et al (2007) track the evolution of
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groups aim to improve firm performa
Page 89 and 90:
distribution of the LBO sponsors, m
Page 91 and 92:
the most difficult cases. This stor
Page 93 and 94:
to see whether these changes of CEO
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Figure 3:This figure represents the
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TablesTable 1: Company size descrip
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Table 5: Changes in the board size,
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Table 7: Board turnoverPanel A: Siz
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Part 2Case studiesThe Global Econom
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European private equity cases: intr
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Exhibit 1: Private equity fund size
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Messer Griesheimann-kristin achleit
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ealized it was not possible to grow
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The deal with Allianz Capital partn
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the deal, the private equity invest
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Exhibit 1: The Messer Griesheim dea
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Exhibit 5: Post buyout structureMes
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New Lookann-kristin achleitnerTechn
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feet. This restricted store space w
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institutional investors why this in
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Although a public listing did not a
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Exhibit 5: Employment development a
Page 131 and 132:
Chinese private equity cases: intro
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Hony Capital and China Glass Holdin
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Hony’s Chinese name means ambitio
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Establishing early agreement on pos
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Executing the IPOEach of the initia
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Exhibit 1A: Summary of Hony Capital
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Exhibit 4: Members of the China Gla
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Exhibit 6A: China Glass post‐acqu
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Exhibit 8: China Glass stock price
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3i Group plc and Little Sheep*Lily
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y an aggressive franchise strategy,
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soul” of the business. But there
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Exhibit 1: Summary information on 3
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Exhibit 6: An excerpt from the 180-
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Indian private equity cases: introd
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ICICI Venture and Subhiksha *Lily F
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investment,” recalled Deshpande.
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2005 - 2007: Moderator, protector a
Page 167 and 168:
Exhibit 3: Subhiksha’s board comp
Page 169 and 170:
Warburg Pincus and Bharti Tele‐Ve
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founded two companies at this time
Page 173 and 174:
By 2003 this restructuring task was
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Exhibit 1C: Private equity investme
Page 177 and 178:
Exhibit 4B: Bharti cellular footpri
Page 179 and 180:
Exhibit 6: Summary of Bharti’s fi
Page 181 and 182:
Exhibit 7: Bharti’s board structu
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In the 1993‐94 academic year, he
Page 185 and 186:
consumer products. She was also a R
Page 187 and 188:
AcknowledgementsJosh LernerHarvard
Page 189:
The World Economic Forum is an inde
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