By Suneel Basson-Bhatoa, Alex McCarney, and Catherine Campbell

Consortium (or “club”) deals involving PE firms have become a common feature of the deal market throughout 2018, with sponsors teaming up with each other or with strategic partners to buy large-cap assets. To the start of November 2018, 20 consortium transactions worth more than US$1 billion were announced, compared to 17 transactions during 2017. Notable recent deals include a Blackstone-led consortium’s US$17 billion deal to acquire a majority stake in Thomson Reuters’ financial and risk business, and CVC and Blackstone’s US$3 billion deal to buy Paysafe. In our view, political and economic uncertainty in Europe, growing confidence in consortium deals worldwide, and the need to put significant amounts of money to work, could prompt international sponsors to target large public and private European companies previously out of reach.

Consortium deals are effective in pursuing these large transactions, however in our view, consortium deals can present challenges.