Q4 Barometer: European deal volume sets new annual record

Unquote and Aberdeen Standard Investments
06 February 2019

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European private equity deal-making reached an all-time high in 2018 despite losing some momentum in the final quarter, according to the latest Unquote Private Equity Barometer, published in association with Aberdeen Standard Investments.

Deal volume reached a record 2,230 for the year, and value rose to an 11-year high of €199bn.

A final quarter slowdown tempered the year's performance, with volume dropping 12% on the previous quarter to 497, making it the weakest quarter of the year. At €30.5bn, aggregate deal value was its lowest since Q3 2016.

The annual volume figure was boosted by a strong year for expansion deals. There were 926 growth capital investments over the year, a four-year high. The slowdown in the final quarter reflected a stumble in the buyout market – where volume dropped 15% to 221 – and in early-stage deals, which registered their lowest number since Q3 2006.

The value of early-stage deals did fall, but not by nearly as much. The average early-stage equity was €10.4m, the fourth highest on record.

Breaking buyouts down by region, the dip was led by a group encompassing Greece, Ireland, Italy, Spain and Portugal, where deal numbers dropped to 27 from 48. It was accompanied by sharp falls in the UK, where volume dropped to 46 from 61; and the Nordic countries, where it declined to 28 from 37.

The fall in total value – enterprise value for buyouts, and equity tickets for expansion and early-stage deals – was due to buyout value falling to a 12-quarter low of €23.3bn. There were only two buyouts valued over €1bn in Q4, down from 12 in Q3. However, the high values seen in the other three quarters of the year were enough to drive annual value to its 11-year high.

Click here to download the full report, including detailed commentary and statistics for the growth capital and venture capital markets, as well as regional breakdowns.