This Year’s US Private Equity Buyouts Reach 1,112 Trillion Won... "Record High"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The scale of corporate acquisitions by U.S. private equity funds (PEFs) is expected to reach an all-time high this year.

On the 28th (local time), the Wall Street Journal (WSJ), citing financial information firm Dealogic, reported that the total announced U.S. corporate acquisitions by private equity funds so far this year have reached $944.4 billion (approximately 1,126 trillion KRW).

This is 2.5 times more than the same period last year and twice the size of the record set in 2007.

The number of corporate acquisitions exceeding $10 billion (approximately 11.9 trillion KRW) this year is five, which is less than the record nine deals in 2006 but already matches the number in 2007.

WSJ analyzed that "in the era of low interest rates, funds from institutional investors such as pension funds seeking high returns are pouring into the private equity industry, activating corporate acquisitions by private equity funds."

According to financial information firm Preqin, the total North American investment capital secured by the PEF industry amounts to $755.6 billion (approximately 901 trillion KRW).

WSJ observed that there is no sign of a slowdown in capital inflows into the private equity industry and suggested that the corporate acquisition boom in the private equity sector may just be beginning.

In particular, firms such as Thoma Bravo, Kohlberg Kravis Roberts (KKR), The Carlyle Group, and Permira Advisors have each formed M&A funds ranging from $15 billion to $22 billion (approximately 17.9 trillion to 26.2 trillion KRW), which explains the series of large corporate acquisition announcements toward the end of the year.

Last week, Bain Capital and Hellman & Friedman announced their acquisition of healthcare technology company Athenahealth for $17 billion.

KKR and Global Infrastructure Partners also acquired data center operator CyrusOne for nearly $12 billion (approximately 14.3 trillion KRW).

Additionally, Advent International and Permira purchased cybersecurity firm McAfee for $11.8 billion (approximately 14.1 trillion KRW).

Earlier in June, a private equity consortium including Blackstone Group, The Carlyle Group, and Hellman & Friedman announced the leveraged buyout (LBO) of U.S. medical supplies company Medline for over $30 billion (approximately 35.8 trillion KRW), the largest deal since the global financial crisis.

WSJ added, "Due to rising stock prices and low interest rates, not only the private equity industry but also the initial public offering (IPO) market is achieving record results this year, and the scale of corporate mergers within the U.S. has doubled compared to last year."

This content was produced with the assistance of AI translation services.