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Q2 Barometer: European buyouts hit 10-quarter high

unquote" and SL Capital
29 July 2014

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Q2's lacklustre growth capital activity was counterbalanced by the highest number of buyout transactions recorded in 10 quarters, according to the latest unquote” Private Equity Barometer, published in association with SL Capital Partners.

Click here to download the full unquote" Private Equity Barometer, published in association with SL Capital.

The recovery in buyouts focused mostly on the €100-1bn segment, which saw a quarter-on-quarter rise in value of more than €6bn. Deal volume for the entire segment hit 126 transactions, up 15% from the first quarter's 110 deals.

Furthermore, the aggregated enterprise value of all European buyouts soared in the second quarter by more than 50% to €21.3bn, compared with just €14bn in the first three months of the year.

There were five deals recorded in Q2 worth €1bn or more, valued at an overall €6bn. This activity is in line with the previous two quarters, when three and four deals worth €5.6bn and €5.7bn respectively were recorded. All five of the Q2 mega-buyouts took place in either Germany or France.

However, the uptick in buyouts was not reflected in growth capital activity, where deal volume plunged to a low of 151, a 20% dip on last quarter's figure. The combined value of growth capital deals in Q2 fell sharply by more than half to €1.5bn compared with €3.4bn in Q1. The UK market was by far the most active territory for expansion deals, with 60 of these transactions taking place in the second quarter.

Early-stage deals recorded a 60% jump volume-wise in the second quarter to 58 deals. This was, however, coming from from a lacklustre Q1, during which just 30 deals were recorded. This uptick in activity saw deal value increase four-fold to €411m, representing the highest total since the end of 2008.

The UK was again the most active destination for early-stage deals, witnessing around a third of these transactions, representing 18 investments. Meanwhile Austria recorded a total of €81m from just two investments, including KKR's capital injection into locomotive leasing business ELL.

Looking at overall European private equity activity figures, a total of 335 transactions were recorded in the first three months to June, marking an increase of just one deal on the previous period. Overall value for all deal types came in at €23.1bn, a strong rebound from Q1's €17.4bn.

All data is sourced from unquote" data, unquote's proprietary database. To conduct your own searches on pan-European private equity trends, visit unquotedata.com