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Record SBO numbers helped drive buyout dealflow in Q2

Christopher Papadopoullos and Greg Gille
08 August 2018

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The second quarter of 2018 saw 94 buyouts sourced from other GPs, a sharp increase on Q1’s 60 SBOs and setting a new quarterly record for European private equity, according to the latest Unquote Private Equity Barometer.

The climb in secondary deals accounted for virtually all of the gain in the quarter's dealflow. Fewer deals were sourced from family and private vendors than in Q1, while the number of carve-outs from local and foreign parent companies rose.

A sizeable boost in mid-market activity was also responsible for buyout numbers reaching a record high in Q2. Overall, there were 255 transactions, up 13% on Q1's 226. The number of deals completed in the mid-cap range (€100m-1bn) soared to a record high of 84 from 47 in Q1. It continues a hot spell in the European buyout market, which has now exceeded 200 deals for five consecutive quarters for the first time in the last 10 years.

Most regions saw an uptick in dealflow, but France and the UK were the standout performers. France registered 61 buyouts, its highest quarterly dealflow since Q2 2007. It has also claimed Europe's top spot for the fourth consecutive quarter. Meanwhile, there were 58 UK transactions, the most since Q2 2008. Deal value also more than doubled in the UK, reaching €10.6bn in Q2 from €5.1bn in Q1.

Again this was driven to a large extent by plentiful trading between GPs. Of the UK's 21 mid-market buyouts, 13 were SBOs, while France counted 10 out of 16.

The largest mid-market SBO in the UK was Omers Private Equity's acquisition of recruitment company Alexander Mann Solutions from New Mountain Capital. Buyers in other secondary deals included usual suspects Cinven, Permira, Mayfair Equity Partners, Vitruvian Partners, Montagu Private Equity and Bridgepoint.

In addition to sustained SBO activity in the mid-market in France, the country was also home to a quartet of >€1bn secondary deals in Q2, which played no small part in the robust aggregate value recorded in the quarter. The WFS, Siaci Saint-Honoré, Delachaux and Exclusive Group SBOs amounted to around €5bn in aggregate EV.

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