Multiples Heatmap: PE continues to pay ever more for assets

Unquote and Clearwater International
24 August 2021

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Though European private equity deal activity cooled slightly in Q2 2021, the prices paid for assets did not, recording their fifth quarterly increase to 11.8x, according to the latest Clearwater Multiples Heatmap.

After a record-breaking first quarter, the pace of European PE deal activity eased in Q2 2021 – although the market remained at near-historic highs. Q2 deal value reached its second highest level in seven years, while deal volume recorded its third highest total.

PE firms have seemingly put the pandemic behind them, and are looking towards growth opportunities in the post-Covid world – notably in healthcare, TMT, financial services and business services. Competition for high-quality targets in these and other sectors continued to propel deal multiples ever higher in the second quarter. In Q2, the average EV/EBITDA multiple over the last 12 months (LTM) for European PE-backed transactions climbed to 11.8x. This is a new record and follows an unbroken run of five quarterly increases.

The UK and Ireland stands out as the top regional hotspot for the third quarter in a row, registering the most deals of any region (68 transactions), and the highest total deal value (EUR 19.3bn). The average multiple for deals in Q2 rose to 13.2x versus 10.8x in the same quarter last year – the biggest year-on-year increase seen in any region.

Click here to download the Q2 Multiples Heatmap report, including:

Detailed breakdowns of pricing and activity trends for Q2 2020
Quarterly pricing movements across the past six quarters
Qualitative deep-dives on the UK & Ireland market and the food & beverages sector