Clearwater Multiples Heatmap: UK and Ireland deals pass 14x mark in Q4

PE buyouts in Europe in 2021 shattered all previous records, with both volume and value soaring. By the end of the year, dealmakers had logged a total of 1,273 transactions – 24% higher than the previous peak in 2019. It was an even more spectacular picture in terms of deal value, with transactions for the year totalling EUR 278bn, up 50% on the previous record of EUR 186bn, again from 2019.

Abundant dry powder – estimated at EUR 1.15tn, according to Preqin – continues to propel PE activity. Indeed, a key feature of 2021 was the increasingly dominant position of PE in the overall deal landscape. To put this in context, PE-backed deals accounted for 23% of all M&A volume in Europe in 2021 – the highest proportion on record.

In Q4, the average EV/ EBITDA multiple over the last 12 months (LTM) for European PE-backed transactions climbed to 12.8x from 12.4x the previous quarter. TMT stands out as the top sector, with the average LTM deal multiple climbing to 15.1x in Q4 – the first time any sector has crossed the 15x threshold.

Among the diverse regions covered in this analysis, Q4's hottest performers were the UK & Ireland and Central and Eastern Europe (CEE). The former recorded a quarterly average multiple of 14.3x, the highest in Europe, while the latter logged the second highest average multiple (14.1x) as well as the strongest quarter-on-quarter change (up by 1.5x).

Click here to download the Q4 Multiples Heatmap report, including:

• Detailed breakdowns of pricing and activity trends for Q4 2021
• Quarterly pricing movements across the past six quarters
• Qualitative deep-dives on the Industrials and Chemicals sector and the near-term outlook for PEs in the UK and Ireland

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