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By: Raymond Bogenrief, Oliver Brahmst, Gary Silverman, White & Case LLP

Despite accumulating a vast, historic pile of capital for acquisitions, private equity has moderated its pace of buyouts in the first half of the year.

Buyout activity fell 14 percent compared to the first half of 2018, with values totaling US$111.1 billion during the first six months of 2019, while volume fell 19 percent to 608 deals. On the other hand, exit activity fared far better, rising 19 percent in deal value to US$148 billion, though volume fell 15 percent to 505 deals.

Whether the first-half slowdown in private equity buyouts represents the start of a sustained decline in activity or a mere pause for thought remains to be seen. Buyout activity remains high when assessed in a historical context. But the industry may be taking a wait-and-see approach given the possibility of a slowdown in the US economy. The question is how long they can wait-with US$2.4 trillion in dry powder globally, firms are under significant pressure to get deals done.

The availability of capital has pushed competition and valuations to exceptional heights, with multiples averaging about 11 times' EBITDA in the US and Europe over the past 12 months, above the level seen prior to the financial crisis. Thus, some firms are biding their time, particularly in industries where strategic buyers-able to issue stock to finance high purchase prices and to justify elevated valuations with synergy estimates-are part......................

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