2011: The year of the mega buyout

Viktor Lundvall
22 July 2011

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While the increase in volume of European buyouts has been modest in 2011, the surge in value has been impressive. Viktor Lundvall investigates

Following on from our last instalment, which tracked and analysed average EBITDA multiples paid by private equity throughout Europe since Q2 2014, this latest edition provides an update for Q3 2015 pricing activity.

You can download the first instalment here, while the full presentation including the Q3 update is available here.

The key findings of the report show that in Q3, private equity deals taking place in western Europe largely converged towards the 9-11x range. This meant that some regions became less expensive, notably Benelux, which fell from an average multiple of 11.5x in Q2 2015 to 9.4x in Q3. However, in others there were notable upticks, including Central and Eastern Europe, which saw average prices rise from 8.4x in Q2 2015 to 9.2x in Q3, and France, which jumped from 9.4x in Q2 2015 to 11x in Q3.

Meanwhile, the DACH, Nordic and UK & Ireland regions held relatively steady. In Southern Europe, there was a notable drop to 8.8x in Q3 2015, down from 10.8x in Q2 3015. However, this decline brings the region's average entry multiple back in line with those seen prior to the first half of 2015.

In terms of sectors, the financial services space appeared particularly expensive, with the average multiple paid by private equity firms creeping up to 12.8x in Q3 2015, up from an already high 11.7x in the previous period. The largest decline was witnessed in the real estate sector, where the average multiple fell from 11.9x in Q2 2015 to 9.7x in the following quarter.

The largest movement in terms of deal size ranges was seen in the €1bn-plus segment, which saw a jump from an average 10.2x in Q2 2015 to 11.4x in the following period. An increase was also seen in the €250-500m range, to 10.8x from 9.8x in Q2 2015.

The most substantial decline in terms of size ranges was in the €50-100m range, where the average entry multiple dropped from 10.6x in Q2 2015 to 9.3x in Q3 2015.