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(Adds detail.) By Marietta Cauchi Of DOW JONES NEWSWIRES LONDON (Dow Jones)--European private equity buyouts continue to gather steam, with activity fueled by a string of "pass-the-parcel" deals in which private equity firms sell on to each other rather than trade buyers or to the public markets in an initial public offering, according to a study released Monday. There were 125 buyouts with a total value of EUR8.6 billion in the second quarter, marking an increase in volume for the fifth consecutive quarter, the Centre for Management Buyout Research, or CMBOR said, writing in Ernst & Young and Barclays Private Equity's market review. Although somewhat lower than the total value of deals in the first quarter, which came in at EUR11.1 billion, value remains much stronger than two years ago and is even topping levels posted in the boom, Ernst & Young said. "Buy-out transaction multiples have rebounded," said Joachim Spill, EMEIA transaction advisory services leader at Ernst & Young. "In the first half of this year, the average price to earnings on larger European deals was 17.9 times--which is actually higher than back in 2007 when the market was at its peak. This is interesting because in 2009, PE [private equity] multiples were barely double-digits," he added. The continued growth is being boosted by secondary buyouts where one private equity firm sells to another private equity firm, and even tertiary or quaternary buyouts, where the asset finds its way into the hands of a third or fourth consecutive buyout owner. In recent weeks there have been a string of such deals. BC Partners sold French frozen foods retailer Picard Surgeles to Lion Capital having bought it from Candover, Permira bought Spanish online travel agency eDreams from TA Associates while HgCapital outbid Cinven Group for Bain Capital's TeamSystem and Carlyle Group is in exclusive talks for B&B, the French budget hotel chain owned by Eurazeo (RF.FR). Overall pass-the-parcel deals accounted for 56% of total deal activity in the first half of 2010, said Christiian Marriott, Director at Barclays Private Equity. Private equity firms' appetite for deals is being driven by sellers' need to realize assets and return cash to investors, many of which will be called upon to invest in subsequent funds, and for buyers a $1 trillion wall of cash being held by funds after a dearth of activity. However these deals aren't without their critics because investors in private equity funds can find themselves still owning the same asset on which they will have to pay more transaction, management and performance fees--just to a different private equity firm. -By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com (END) Dow Jones Newswires August 02, 2010 11:11 ET (15:11 GMT)