European private equity market hits 8-year high

The value of European private equity deals through 2015 has hit its highest level since 2007, according to data published by the Centre for Management Buyout Research.

So far the total value of all deals stands at €80.9bn, the highest yearly total since 2007, when the value hit €172.9bn. This is also the fourth highest year recorded by CMBOR, behind 2007, 2006 and 2005 respectively.

Currently, the total exit value in Europe is estimated at €153.2bn, which is a new record according to the methodology; IPOs and trade sales set records at €48.7bn and €63.8bn respectively.

CMBOR’s latest annual report suggests there were many bigger deals helping to drive the private equity market on this past year. Some 19 deals worth more than €1bn were recorded, against 13 the previous year. These bigger deals account for about half the total value of the European buyout market. Such deals were also geographically spread “with Switzerland (1), Denmark (1), France (3), Germany (4), Sweden (1), Austria (1), Spain (1) and the UK (7) all seeing deals of €1bn and over during the course of the year.”

“The spread of large deals across Europe, suggests a resurgence in the private equity market across the continent. For instance, Belgium has had a particularly strong year with total value of deals at €3.2bn, just below the 2007 record value, while Denmark has had its strongest year since 2006 (€4.8bn). Switzerland and Austria also had impressive years with the total value of deals in 2015 standing at €3.7bn and €2.6bn respectively, which in both cases are record values,” CMBR said.

And while the UK retains its position as the strongest European deal market, with value totalling €26.8bn, France has seen a rebound putting it on par with Germany.

Other findings in the data point to strong deal flows in manufacturing and retail, but less so in technology, media and telecommunication. The value of deals in the support services sector remained fairly constant, at around €9bn compared to €9.3bn in 2014.

Christiian Marriott, Investor Relations partner at Equistone Partners Europe Limited, which sponsored CMBOR’s research, said: “2015 has been a very strong year for European private equity deal activity, with the UK still leading the way. However, all the core European markets have performed well, which reflects the trend of a consistent increase in total European buyout value of about €10bn since 2013. Boosted by the Verallia buyout, France has been strong in 2015 and made up previously lost ground on Germany, which in recent years has firmly established itself as Europe’s second biggest deal market behind the UK.”

“The European private equity exit market also had an outstanding 2015, achieving a record total value. While volatility in European markets stifled the IPO activity in the previous two quarters, a flurry of big IPOs at the end year, including Worldpay and Scout24, helped the boost the value to a record number. However, it has not all been about IPOs, as there have been more exits via trade sales than flotations amongst the year’s top 10 largest deals.”

“2015 clearly shows that big deals are back, as shown by the highest average deal value and number of billion plus deals since 2007. With the final quarter proving strong for both deals and exits, the European private equity market will start 2016 with positive momentum.”    

 

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