Record year for Swiss buyouts

The break-up of Swissair led to major buyout deals. www.swissaviation.ch

Spin-outs far outweigh succession this year as dozens of divisions or subsidiaries of larger Swiss public and private companies divested for strategic reasons or due to capital constraints.

A new study published by the Swiss Private Equity Association and the Corporate Finance Group reveals that 35 buyouts took place, affecting more than 50,000 workers.

The previous year only 4,000 people were employed by firms that completed management buyouts.

The total number of deals in 2002 was similar to the previous year – 35 in 2002 compared with 34 in 2001. But the amount of money involved broke records, according to industry insiders.

The large volume was due primarily to the break-up of Switzerland’s national airline Swissair, which went bankrupt in 2001.

These deals attracted international buyout teams who paid using their own capital as well as leveraged capital from banks.

Swissair break-up

Candover acquired Swissport, the world’s second-largest ground-handling agent, from Swissair in February 2002 for €393 million.

3i backed a buyout of SR Technics for €425 million, and Texas Pacific Group has purchased GateGourmet.

The rest of the deals were mid-sized and smaller. CapVis and Zurmont Finanz were two of the active firms in the mid-market in 2002.

Buyout firms have a bigger opportunity to participate in transactions these days as corporate investors, basically their competition, are experiencing economic constraints.

Either they cannot raise new capital to fund purchases or they are too busy concentrating on core activity, said Beat Unternährer of TCFG in an announcement to the press.

Valerie Thompson

Record buyouts

In 2002 there were 35 buyouts in Switzerland.
In 2001 there were 34 buyouts in Switzerland.
But volume (a tenfold increase) was much higher.
Deal flow was driven by the break-up of Swissair.