Pitchbook has a new report out about private equity activity in Europe. It indicates that, despite a slow start to the year, PE deal activity picked up notably in the second quarter. Across the continent, there were 804 deals 2Q with a total valuation of €88.5 billion.
Deals above the €1 billion threshold? There were only seven such deals in the first quarter; there were 13 in the second. One of these large deals was a €4.6 billion investment for a 57.8% stake in AccorInvest. That implies a valuation of AccorInvest at €8.0 billion, and makes this the largest buyout in the business-to-consumer space since 2013.
The median deal value plateaued in recent years. There were also 219 exits in 2Q . More than half (51%) of these exits were secondary buyouts (SBOs). The IPO market remains lukewarm in Europe. Only 17 companies went public 2Q.
Sectors and Regions
Taken as a whole, the first half of 2018 puts the European PE market on pace for another solid year, the analysis says, akin to 2015 and 2017, which in terms of total deal value were the two best years for the PE market since the global financial crisis.
Looking at specific sectors: information technology has increased its share of both the deal count and deal value. IT has accounted for 21% of all PE deals in the first half of this year, and 24% of so-called “bolt-on” acquisitions (that is, all acquisitions in which a PE firm, already in possession of company A, acquires company B specifically to increase the value of A.)
Chopping the numbers by geography: the U.K. and Ireland’s proportion of deal flow has shrunk, while that of France and Benelux has grown. Just after the Brexit vote in 2016, there was a consensus “business as usual” view in the U.K. But two years in, with as the report puts it “the exit date quickly approaching and high-level government officials stepping down due to a lack of cohesive vision,” that consensus has not held. But the region on the western side of the channel still has a lot going for it, including “deep capital markets and a talent pool,” so it is not to be counted out in the second half.
