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Due to a technical problem on Wednesday Jan
16, we are upgrading the news management system by a Canadian
software company, which will be
completed in coming days.
It has taken longer than
anticipated. That is one of the drawbacks of outsourcing. C'est
la vie - even Google News updating falls behind at times!
 Business
News Headlines to Jan 16 2008
Today's News Links
Click for Monday's stories and links from Jan 17 2008
Squeeze on bank funding
likely to see a decline in the number of Irish acquisitions in 2008 Ion
Equity
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Squeeze on bank
funding for private equity deals means trade buyers now in a
stronger position
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Banks reducing
level of debt they are prepared to commit to buyouts by up to
20%
-
Fourth quarter 2007
sees 10% increase in value of M&A deals to 9.5 billion, 8%
increase in number of deals to 83
Banks and other lenders are reducing the amount of
money they will lend to fund private equity and leveraged
acquisitions by as much as 20% and this has put prospective trade
buyers in a stronger position when it comes to making acquisitions,
Ion Equity Director Joe Devine
has stated.
Writing in Ions M&A Tracker Survey
for the fourth quarter of 2007, Devine says that private equity and
other leveraged buyers accounted for some 40% of the 22 billion
spent on acquisitions in 2007.
These buyers rely on high levels of bank debt to
fund their acquisitions. The dislocation in credit markets
experienced since September 2007 is having a serious effect on these
types of transactions. Banks are reducing the level of debt they
are prepared to commit to buyouts by as much as 20%.
This places higher equity demands on leveraged buyers and puts
trade buyers in a stronger position. Accordingly we expect a
decline in deal volumes in 2008 as credit markets are unlikely to
fully recover until well into the year, Devine states.
The M&A Tracker survey for the fourth quarter of 2007 shows an
increase in the number of deals and their value. The number of
deals increased from 77 to 83 while the value of those deals
increased from 8.6 billion to 9.5 billion. The fourth quarter
figures were distorted to a degree by the 5.7 billion acquisition
of the IFSC-based bank Depfa by Hypo
Real Estate, but the fourth quarter 2006 figures were also distorted
by one big acquisition the 4 billion acquisition of Houghton
Mifflin by Riverdeep.
The finance sector boosted by the Hypo/Depfa
deal accounted for more than 60% of deal value in the fourth
quarter while building/construction/property accounted for more than
11% of the value of deals. This sector, however, accounted for more
than 51% of the number of individual deals in the period. The
leisure/travel sector accounted for more than 7 per cent of deal
values in the fourth quarter mainly due to two big hotel
acquisitions by Moran Hotels and Prem
Group.
The 10 biggest individual deals in the fourth
quarter of 2007 were:
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Hypo Real Estate / Depfa
Bank - 5,700 million
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E.On
/ Airtricity North America assets -
990 million
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Moran Hotels / Bewley
Hotels - 500 million
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Communicorp
/ Emap Irish radio assets - 200
million
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Morvest
(Joe Moran) / Manor Park Homebuilders - 181 million
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CRH / Cemex
Arizona/Florida assets - 170 million
-
Prem
Group / 11 hotels France/Belgium - 168 million
-
AAC Partners / Ocean Media (Ion Equity) -
153 million
-
Greenstar
/ Mid-America Recycling - 86 million
-
Vodafone / Perlico
Communications - 80 million
For the full year, the value of deals increased more than 44% to
22.3 billion, although the number of deals fell from 250 in 2006 to
240 in 2007. Three large deals in 2007 contributed to the big
increase in deal value the 4 billion
Riverdeep/Houghton Mifflin deal, the 1.6 billion Quinlan
Private/Marriott Hotels deal and the 5.7 billion Hypo Real Estate/Depfa
deal.
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