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

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TablesTable 3: Size and pricing of LBO dealsTable 3C: By region (2001–2007 only)Enterprise Value, 2007 USD Implied Enterprise Value/Revenues Implied Enterprise Value/EBITDAMean Median N Observed Mean Median N Observed Mean Median N ObservedUnited States 389.6 63.5 2,029 41% 1.8 0.9 580 12% 11.2 8.3 413 7%Canada 308.8 39.0 162 46% 4.1 1.1 70 20% 11.4 8.1 45 13%Continental Europe 439.0 77.6 1,129 33% 1.5 1.0 417 12% 10.6 7.6 170 5%Scandinavia 381.1 8.1 206 29% 1.5 1.1 91 13% 9.8 8.5 50 7%United Kingdom 279.6 36.1 1,315 54% 1.9 0.8 294 12% 12.4 8.5 141 6%Africa / Middle East 239.5 25.9 126 55% 7.3 1.0 30 13% 9.2 6.2 18 8%Asia 386.5 109.4 215 55% 9.5 0.9 52 13% 14.4 9.9 33 8%Australia 224.3 53.9 136 57% 1.8 0.8 30 13% 9.0 8.1 19 8%Eastern Europe 173.2 27.3 121 40% 1.5 0.7 26 9% 8.4 8.6 4 1%Latin America 408.0 102.9 58 45% 2.7 2.0 17 13% 10.4 7.1 12 9%Total 358.5 55.5 5,497 41% 2.2 0.9 1607 12% 11.2 8.2 905 7%Table 4: Exits of individual LBO transactionsTable 4A: By time of LBO transactionNumber of exits% of exits1970- 1985- 1990- 1995- 2000- 2003- 2006- 1970- 1985- 1990- 1995- 2000- 2003- 2006-All deals 1984 1989 1994 1999 2002 2005 2007 Total 1984 1989 1994 1999 2002 2005 2007 TotalBankruptcy 13 36 53 260 126 61 3 552 7% 6% 5% 8% 6% 4% 3% 6%IPO 54 155 233 372 152 143 1 1,110 28% 25% 22% 11% 8% 10% 1% 13%Sold to strategic buyer 63 215 403 1,288 759 595 43 3,366 32% 34% 38% 39% 39% 41% 38% 39%Sold to financial buyer 11 82 182 774 595 437 25 2,106 6% 13% 17% 24% 30% 30% 22% 24%Sold to LBO-backed firm 4 17 34 175 106 94 16 446 2% 3% 3% 5% 5% 6% 14% 5%Sold to management 1 8 15 53 38 14 1 130 1% 1% 1% 2% 2% 1% 1% 2%Other / unknown 50 112 128 350 178 105 25 948 26% 18% 12% 11% 9% 7% 22% 11%No exit (% of all deals) 8 37 110 1,389 2,208 4,683 4,304 12,739 4% 6% 9% 30% 53% 76% 97% 60%)With financial 1970- 1985- 1990- 1995- 2000- 2003- 2006- 1970- 1985- 1990- 1995- 2000- 2003- 2006-sponsor 1984 1989 1994 1999 2002 2005 2007 Total 1984 1989 1994 1999 2002 2005 2007 TotalBankruptcy 13 35 52 249 97 40 2 488 7% 6% 5% 8% 6% 3% 3% 6%IPO 53 152 232 360 142 133 1 1,073 28% 25% 23% 11% 9% 11% 1% 14%Sold to strategic buyer 60 211 387 1,258 616 472 27 3,031 31% 35% 38% 40% 37% 40% 35% 38%Sold to financial buyer 10 77 178 742 521 372 13 1,913 5% 13% 17% 23% 31% 31% 17% 24%Sold to LBO-backed firm 4 17 34 167 95 78 15 410 2% 3% 3% 5% 6% 7% 19% 5%Sold to management 1 8 15 50 31 7 1 113 1% 1% 1% 2% 2% 1% 1% 1%Other / unknown 50 111 127 340 166 86 19 899 26% 18% 12% 11% 10% 7% 24% 11%No exit (% of PE deals) 6 31 98 1,185 1,268 3,348 3,340 9,276 3% 5% 9% 27% 43% 74% 98% 54%Without financial 1970- 1985- 1990- 1995- 2000- 2003- 2006- 1970- 1985- 1990- 1995- 2000- 2003- 2006-sponsor 1984 1989 1994 1999 2002 2005 2007 Total 1984 1989 1994 1999 2002 2005 2007 TotalBankruptcy 0 1 1 11 29 21 1 64 0% 7% 4% 10% 10% 8% 3% 9%IPO 1 3 1 12 10 10 0 37 20% 21% 4% 11% 3% 4% 0% 5%Sold to strategic buyer 3 4 16 30 143 123 16 335 60% 29% 70% 28% 50% 47% 44% 46%Sold to financial buyer 1 5 4 32 74 65 12 193 20% 36% 17% 30% 26% 25% 33% 26%Sold to LBO-backed firm 0 0 0 8 11 16 1 36 0% 0% 0% 8% 4% 6% 3% 5%Sold to management 0 0 0 3 7 7 0 17 0% 0% 0% 3% 2% 3% 0% 2%Other / unknown 0 1 1 10 12 19 6 49 0% 7% 4% 9% 4% 7% 17% 7%No exit (% of MBO deals) 2 6 12 204 940 1,335 964 3,463 29% 30% 34% 66% 77% 84% 96% 83%18 Large-sample studies: DemographyThe Global Economic Impact of Private Equity Report 2008
Table 4: Exits of individual LBO transactionsTable 4B: By LBO type and region (1970–2002 only)Number of transactions by LBO typePercentage of exited transactionsPublic Private Financial Public Private Financialto private to private Divisional vendor Distressed Total to private to private Divisional vendor Distressed TotalBankruptcy 36 296 97 39 20 488 9% 7% 5% 7% 16% 7%IPO 69 559 268 59 11 966 16% 13% 15% 11% 9% 14%Fin. Buyer 120 914 419 169 22 1,644 29% 22% 23% 32% 17% 23%LBO-backedcorporate buyer 16 188 100 27 5 336 4% 5% 5% 5% 4% 5%Sold to mgmt 9 58 35 12 1 115 2% 1% 2% 2% 1% 2%Strategic buyer 142 1,538 804 191 53 2728 34% 37% 44% 37% 41% 38%Other / unknown 28 623 125 25 17 818 7% 15% 7% 5% 13% 12%100% 100% 100% 100% 100% 100%Total exited 420 4,176 1,848 522 129 7,095 60% 69% 59% 69% 62% 65%No exit 277 1,876 1,280 240 79 3,752 40% 31% 41% 31% 38% 35%100% 100% 100% 100% 100% 100%ContinentContinentUS and Europe & Rest of US and Europe & Rest ofCanada UK Scandin. World Total Canada UK Scandin. World TotalBankruptcy 330 112 38 8 488 9% 8% 3% 2% 7%IPO 588 165 147 66 966 15% 11% 10% 19% 14%Fin. Buyer 763 333 490 58 1,644 20% 22% 34% 17% 23%LBO-backedcorporate buyer 230 52 46 8 336 6% 3% 3% 2% 5%Sold to mgmt 33 41 36 5 115 1% 3% 3% 1% 2%Strategic buyer 1,444 630 510 144 2,728 38% 42% 36% 42% 38%Other / unknown 451 155 161 51 818 12% 10% 11% 15% 12%100% 100% 100% 100% 100%Total exited 3,839 1,488 1,428 340 7,095 68% 67% 62% 52% 65%No exit 1,830 741 862 319 3,752 32% 33% 38% 48% 35%The Global Economic Impact of Private Equity Report 2008 Large-sample studies: Demography 19
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 and 34: TablesTable 1: Capital IQ 1980s cov
Page 35: Table 2: Magnitude and growth of LB
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
Page 87 and 88:
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
Page 95 and 96:
Figure 3:This figure represents the
Page 97 and 98:
TablesTable 1: Company size descrip
Page 99 and 100:
Table 5: Changes in the board size,
Page 101 and 102:
Table 7: Board turnoverPanel A: Siz
Page 103 and 104:
Part 2Case studiesThe Global Econom
Page 105 and 106:
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
Page 113 and 114:
The deal with Allianz Capital partn
Page 115 and 116:
the deal, the private equity invest
Page 117 and 118:
Exhibit 1: The Messer Griesheim dea
Page 119 and 120:
Exhibit 5: Post buyout structureMes
Page 121 and 122:
New Lookann-kristin achleitnerTechn
Page 123 and 124:
feet. This restricted store space w
Page 125 and 126:
institutional investors why this in
Page 127 and 128:
Although a public listing did not a
Page 129 and 130:
Exhibit 5: Employment development a
Page 131 and 132:
Chinese private equity cases: intro
Page 133 and 134:
Hony Capital and China Glass Holdin
Page 135 and 136:
Hony’s Chinese name means ambitio
Page 137 and 138:
Establishing early agreement on pos
Page 139 and 140:
Executing the IPOEach of the initia
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Exhibit 1A: Summary of Hony Capital
Page 143 and 144:
Exhibit 4: Members of the China Gla
Page 145 and 146:
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,
Page 153 and 154:
soul” of the business. But there
Page 155 and 156:
Exhibit 1: Summary information on 3
Page 157 and 158:
Exhibit 6: An excerpt from the 180-
Page 159 and 160:
Indian private equity cases: introd
Page 161 and 162:
ICICI Venture and Subhiksha *Lily F
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investment,” recalled Deshpande.
Page 165 and 166:
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
Page 171 and 172:
founded two companies at this time
Page 173 and 174:
By 2003 this restructuring task was
Page 175 and 176:
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
Page 183 and 184:
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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