Too fast he could probably put a stop to this dynamic

Eclipsés by the venture capital at the turn of the Millennium, the LBO professionals enjoy today their hour of glory. Indeed, the nature with horror of the vacuum, the LBO boom succeeded the bursting of the technology bubble. The total amount of leveraged acquisitions carried out in France thus grew 39 per year on average between 2001 and 2005, which is two times and a half faster than in Europe ( 15 per year), where they have exceeded the last year the bar symbolic EUR 100 billion. The number of companies that each year the subject of a LBO has increased by 55 between 2003 and 2005, according to the Afic. Whereas the own funds invested in a LBO have tripled from 2000.

Is this a new bubble which could explode in turn The rate of rise of the interest rates, starting from historically low levels, will be crucial for the future of the profession. Too fast, he could probably put a stop to this dynamic. Gradually, he leave time for investment funds to adapt their models by keeping most of the current margins of manoeuvre. Because it is in large part by the sophistication of financial engineering, coupled with the arrival of new investors in debt markets, that the LBO has experienced one of the major transformations of its expansion.

"With a growing share of the debt that is more depreciable over time but only refundable in fine, it has invented a concept to the LBO even if the company is to finance growth", explains Olivier Dousset, Associate Director of the Bank of business Close Brothers. So today ' today, a growing number of companies in LBO to allow external growth. The number of acquisitions they have effected almost tripled year last from 2004, according to the Net LBO barometer of Barclays Private Equity.

Heritage management

This recent phenomenon has definitely opened new horizons to the LBO. Accustomed to readjustment it companies so far by apartments, investment funds can also now play the map of the concentration of business by merging actors, such as for example in the cable.

The new clothes of the LBO are also a tool for wealth management for heads of family businesses. "By bringing a shareholder financial capital, majority or minority, a pattern of 40 or 50 years may"liquefy"a part of its heritage often fully invested in the company while remaining at the head of his case and without the need to sell", underlines the partner of a Fund.

Known as OBO (read glossary page 6), this technique also facilitates smooth succession in family businesses, a pattern without Dolphin can then organize the progressive transmission of capital in its leadership team. While freeing up new ways to accelerate the development of the activity. "last but not least", raised money for two years by the Fund (see below) provide almost mechanically the LBO high growth in the next three to five years. Indeed, this offer of capital will arrive for major groups which unburdened of activities after their recent frenzy of external growth operations. This is to their greatest advantage, now much better than their industrial competitors paying funds.