PE Public to Private Buyouts on the Rise

Madison Dearborn Partners has entered into an agreement to acquire Bway (NYSE: BWY) in a deal valued at $915 million. The $20 a share offer represents a 25% premium to the company's previous 30-day closing average. BofA Merrill Lynch and Deutsche Bank are providing financing for the deal. Bway manufactures metal and rigid plastic containers. Kelso & Co is Bway's largest shareholder and former owner. Kelso acquired the company in 2003 for $383 million and took the company public in 2007 at $15 per share.

Public to Private buyouts are off to a fast start in 2010 with 10 completed or announced deals compared to 23 in all of 2009, according to the PitchBook Platform. The median deal amount is up as well, to $278 million in 2010 from only $121.5 million in 2009, and is even above 2008's median of $228 million. The rise in deal flow and median deal amount is likely attributable to an increased amount of available leverage, companies' increased willingness to make deals due to stabilized public markets and the ability of PE firms to find undervalued companies battered by the recession and credit crisis.