European buyout dealflow falls 30% year-on-year

Short of a Christmas miracle in the last two weeks of the year, 2012 will stand as a lacklustre vintage in post-crash private equity annals: the 354 deals worth an overall €57bn recorded to date are down by 30% and 22% respectively compared to 2011 figures.

Although 2012 activity is far from the 2009 nadir (336 buyouts worth a paltry €29bn), it still remains far behind 2010 figures (€69bn across 454 deals).

Not all market segments fared equally in this past year, though. Contrary to what one might have expected, the large-cap buyout market (€1bn EV and above) remained healthy for instance: although dealflow went down from 16 to 13 transactions, overall value kept stable at around €22bn.

The upper mid-market (€250-500m) on the other hand faced strong headwinds: with 19 deals worth an overall €6.6bn, activity in the segment was halved compared to 2011 figures. The lower mid-market (€50-250m) fared slightly better, with activity dropping by 40% in volume and a third in value.

This story of contrasts also extends to regional criteria. While European private equity as a whole will want to forget 2012, the UK had a particularly strong year: dealflow in the country remained stable at 135 buyouts, but the overall value of those deals shot up by 46% to €23bn. Meanwhile France truly experienced an annus horribilis, blamed by many on strong fiscal uncertainty following the elections held in Q2: France was home to only 50 buyouts (against nearly 100 last year) and overall value tumbled by two thirds to €5.7bn.

For a more in-depth analysis of the European buyout market in 2012, look out for the next issue of the unquote" Private Equity Barometer, published in association with Arle Capital Partners towards the end of January 2013.

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