North American Private Equity in Review (half-year 2007)

By Hogan & Hartson in association with Bowne and mergermarket

The first six months of 2007 set a new high for private equity deal-making. North America saw $460bn in buyout deal value, which is already more than total deal value for 2006. This 2007 half-year report by Hogan & Hartson LLP, in association with Bowne and mergermarket highlights the most recent trends and developments in the North American PE market.

Drivers for this pace continue to include investors' pursuit of superior returns generated by alternative asset classes, relatively inexpensive acquisition financing and, in the United States, avoidance of prospective Sarbanes-Oxley compliance costs through going private transactions or M&A exits, as opposed to public offerings. The continued success of certain private equity funds and increased profile of private equity as a result of a continuing parade of mega-buyouts has led to increased public and regulatory scrutiny of the sector. It remains unclear whether developing issues in the regulatory environment, particularly with respect to taxation of carried interest and publicly traded partnerships, concerns about leverage rations and dividend recapitalizations or increasing financing costs will slow this pace.