Buyouts Of Financial Services Cos To Increase On Rising Values - Study
September 24 2009 - 11:28AM
Dow Jones News
Private equity activity in the financial services industry is
poised to increase as valuations pick up and companies offload
non-core assets, according to research released Thursday.
Over the first half of this year private equity funds invested
just $4.9 billion in 24 deals, down from $19.2 billion in 89 deals
over the same period last year, said Freeman & Co., advisor to
the financial services industry.
The largest transactions involved the rescue of U.S. banks such
as the $1.3 billion buyout of IndyMac Federal Bank by JC Flowers
and Stone Point and the subsequent acquisition of Bank United for
$1 billion by Blackstone Group (BX), Carlyle Group and
Centerbridge.
"Public company valuations in financial services are off their
lows to more realistic levels," said Eric C. Weber managing
director of Freeman & Co.
"We expect private equity firms to have ample opportunities as
large financial institutions accelerate the sale of non-core assets
now that valuations have improved," he added.
Several buyout shops have geared up to take advantage of the
disruption in the financial services sector caused by the collapse
of Lehman Brothers Holdings Inc. (LEHMQ) and JPMorgan Chase Co.'s
(JPM) acquisition of near-failed Bear Stearns last year.
For example, London-based CVC Capital Partners set up set up a
new Financial Institutions Group specifically to target the sector
and only narrowly lost out in its pursuit of Barclays PLC's (BCS)
iShares business earlier this year. Other firms such as Permira
have boosted their expertise in the sector with a number of
appointments.
-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241;
marietta.cauchi@dowjones.com