2005 Breaks Records for Private Buyouts

Bankers and economists say this year may be another global record-breaker for private equity deals.

Private equity firms struck deals worth $396 billion in 2005, a third straight record year and a 51 percent increase over the year before, the Associated Press reported, citing Thomson Financial.

Another record was reached in the amount of money raised by buyout houses in new investment–$261 billion, Private Equity Intelligence of London said. A third of the cash comes from pension funds.


Easy & Profitable Client Payroll with PayCycle

Now is a great time to get clients set up for payroll. We’d like to invite you to a FREE 60-minute web seminar sponsored by PayCycle, the leader in on-demand payroll. During this informative session, you’ll discover how to:

  1. Automate payroll tasks from paychecks to W-2’s
  2. Save time with electronic tax payments and filings
  3. Increase year-round firm profitability without adding staff or infrastructure

Come see for yourself how easy and profitable payroll can be - CLICK HERE TO REGISTER Hurry! Spaces are limited and the sessions fill up quickly.

All PayCycle webinar attendees will receive 1 month free on PayCycle’s service. After the free period, PayCycle costs just $14.99 per client per month for the first 5 employees. Each additional employee is just $0.25 per month. This low monthly fee includes everything you need to process payroll, including a firm-branded website for clients, direct deposit, electronic tax payments and filings, seamless integration with QuickBooks, ATX, CCH and other leading accounting software, free customer support with payroll experts, customized marketing resources to solicit your payroll service to clients, and much more.

Learn More Register for a Web Seminar Sign Up Now

Observers have also noted a 150 percent global surge in “take-private deals,” meaning the company's stock is removed from public trading. Last year's biggest take-private deal was a corporate takeover. Conglomerate Koch Industries Inc. of Kansas, agreed to pay $13.2 billion for Georgia-Pacific Corp., a paper products-maker, bumping out Cargill Inc. as the largest privately held U.S. company.

The buyout frenzy may slow in the U.S., some say, because interest rates and stock markets are ready to rise. "Private equity houses are going to have to work much harder to get the returns they need," said Neil Austin, a corporate finance partner at accounting firm KPMG. "We might have reached a sort of leveling-off."

Stephen Schwarzman, the chairman and chief executive of Blackstone, one of the biggest buyout houses, believes that private equity returns have peaked. "Nothing will carry on as swimmingly as it has,” he told the Sunday Times of western Australia. “It is illogical to assume things could continue as they have been. Returns inevitably will come down, but from so lofty a level as to be almost unbelievable."

Buyouts are lucrative for firms' chief executives. The Centre for Management Buyout Research said in a new study that a chief executive, on average, makes about £16 million from leading a £100 million-plus takeover of his company. A buyout of that size yielded its investors a £293.3 million profit, or a return of about 3.5 times the equity invested, the Times of London reported.

You may like these other stories...

Hertz withdraws full-year forecast, cites accounting review, challengesRental car company Hertz Global Holdings Inc. said on Tuesday it is withdrawing its full-year financial forecast and expects 2014 results to be “...
Treasury prepares options to address tax inversionsDamian Paletta of the Wall Street Journal reported on Monday that US Treasury Department officials are assembling a list of administrative options for Treasury Secretary...
Read more from Larry Perry here and in the Today's World of Audits archive.In my previous article, I discussed auditing standards and the impact of the assessed level of risk of material misstatement (RMM) on the design...

Already a member? log in here.

Upcoming CPE Webinars

Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.