Hellman's $11 Billion Bid Shows PE Megadeal Hunger

(Bloomberg) -- Hellman & Friedman’s $11 billion deal for Ultimate Software Group is the latest mega buyout that shows private equity firms are getting bolder and their deals are getting bigger.

The buyout firm had bounced back from a rebuffed 4.68 billion euro ($5.35 billion) bid for a majority stake in German tech firm Scout24 AG to land a deal for the U.S.-based human resources software firm, agreeing to pay $331.50 per share in cash on Monday.

As private equity firms raise more cash for deals -- the amount of dry powder available to fund managers has risen to $2.1 trillion, according to data provider Preqin -- transactions are getting larger. The number of private equity buyouts larger than $1 billion has been growing since the financial crisis and hit a high of 74 last year, the most since 2007, according to data compiled by Bloomberg.

The average deal size in the Americas, Europe and Asia last year was above $300 million, continuing an upward trend that started around 2009, according to research from financial data firm PitchBook. For the Americas, that represented a 174 percent increase from 2009. In Europe, it was 190 percent and in Asia, 245 percent, the data show.

So far, 2019 is also looking promising, with several deals larger than $10 billion in the works.

  • In January, Apollo Global Management lost out on acquiring Arconic Inc. for about $10.7 billion, in what would have been one of the largest leveraged buyouts since the financial crisis. But the firm later agreed to buy British packaging maker RPC Group Plc for 3.32 billion pounds ($4.34 billion).
  • Not that even that deal’s a sure thing. Berry Global Group is considering its own bid for RPC and has requested due diligence on the bottle maker, according to a statement last month.
  • Apollo, billionaire Leon Black’s buyout firm is also considering buying all or part of General Electric Co.’s jet-leasing business, potentially valued at $40 billion, people familiar with the matter said last month. That would make it one of the largest private equity deals of all time, according to data compiled by Bloomberg.
  • Brookfield Asset Management Inc. is considering a bid for Dutch phone company Royal KPN NV, which has a market value of about $13 billion, people familiar with the matter said on Thursday.
  • Consumer data titan Nielsen Holdings Plc has also drawn interest from buyout firms Blackstone Group LP and Carlyle Group LP as the $9.1 billion market value firm faces pressure from an activist investors, people familiar with the matter said last year.
  • In January 2018, a group led by Blackstone acquired a majority stake in Thomson Reuters Corp.’s financial and risk unit in a deal that valued the business at $17 billion -- the firm’s biggest buyout in a decade. Bloomberg LP competes with Thomson Reuters in providing financial news, data and analytics.

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