KKR dominates Q1 deal market

Even before the announcement of the buyout of US electronic payments company First Data Corp for $27.9 billion (€20.9 billion) was announced yesterday, Kohlberg Kravis Roberts was the leading the pack in both volume and number of private equity deals so far this year.

In the first quarter, the New York-based private equity firm announced seven acquisitions totaling $77.3 billion, or 47.6 percent of all financial sponsor volume over the same period, according to Dealogic. Adding the First Data acquisition, KKR’s buyout activity totals $104.5 billion, or 56 percent of all buyout volume in the January 1 to April 2 period.

KKR’s extraordinary surge in activity has helped break records: private equity buyout volume reached $197 billion via 588 deals in the first quarter, an increase of 82 percent from the same period last year. This total also represents 16 percent of total announced M&A volume, compared to 11 percent in the first quarter of 2006, according to Dealogic.

So far this year, KKR’s bids include the $43.8 billion acquisition of Texas energy company TXU Corp, the largest proposed buyout in history, and UK health and beauty retailer Alliance Boots for $18.9 billion, the largest proposed European buyout ever.

The biggest investment banking beneficiary of KKR’s activity is JPMorgan, which Dealogic estimates was paid $120 million in advisory fees in the first quarter alone. The investment bank also led in financial sponsor bank revenue rankings, at $467 million or 11 percent of the market.

Private equity firms have paid $4.3 billion in fees, up 32 percent from the same period last year. TPG led fee rankings at $267 million in fees paid, of which 17 percent to Deutsche Bank.

The US and Europe lead in financial sponsor investment banking revenue, accounting for 53 percent and 40 percent of all revenue generated, respectively. But fees in Asia, although only $154 million paid, were up 71 percent from the first quarter of last year.