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Q2 Barometer: European buyout activity rebounds

unquote" and SL Capital
10 August 2016

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Combined second quarter buyout values across Europe rose 80% compared with Q1, according to the latest unquote” Private Equity Barometer, published in association with SL Capital Partners.

The aggregate value of deals across Europe rose to €27.3bn compared to €15.2bn in the first quarter of 2016. This was mirrored by an - albeit more modest - 11% increase in the total of number of buyouts. The uptick in deal volume was primarily accounted for by an increase in the large-cap segment - deals valued at €1bn and higher - and the small-cap market.

Throughout the first half of 2016 as a whole, the UK saw investors shy away from mid-market and large-cap deals as the country prepared to vote over its membership of the EU. Combined, these segments saw volume decline by 41% from 29 deals to 17 compared to H2 2015, while value dropped 67% from €15bn to €4.9bn.

Contrastingly, over the same period Britain saw a rise in the number of small-cap deals from 42 to 49, with aggregate value also rising from €1.6bn to €2bn. The bias towards smaller deals prior to the referendum is perhaps not so surprising, given that the companies involved are usually less exposed to international markets and are by their very nature less dependent on European or global issues.

France, which had performed particularly strongly in Q1, was the only European region to record a slowdown in dealflow quarter-on-quarter, dropping from 39 deals to 26. However, the country also hosted the largest European buyout during the three-month period, with Bridgepoint and Eurazeo fully divesting French real estate group Foncia to Partners Group in a deal valued at €1.8bn.

Bucking another Q1 2016 trend, deals sourced from family and private owners increased as a share of quarterly volume, rising from 57 to 68 deals. Another vendor group to increase significantly was institutional investors, with 'pass-the-parcel deals' climbing from 54 to 62.

Read the full report, including detailed commentary and statistics for the growth capital and venture capital markets, as well as regional breakdowns