The UK held on to its top spot, both in numbers and value. There were 38 deals in the second quarter, valued at €3.3b, putting it head and shoulders above other markets in Europe.
Sweden claims the largest buyout of the quarter with the sale of Ahlsell, the construction products and machinery distributor, to CVC for €1.8b. This was Europe’s largest private equity deal since last summer, and marked the exit of Cinven and Goldman Sachs from the company.
Germany saw the number of deals completed during Q2 fall to 12, compared with the previous quarter’s 15.Germany also saw its combined values fall from €0.7b in Q1 to €0.2b, just over a 10th of the figure recorded at the same time last year (€1.5b).
Stefan Ostheim, Ernst & Young’s PE Leader in Germany believes wider macroeconomic factors are impactingon current activity levels in Germany:
“The world is looking to Germany to fix the ongoing Eurozone crisis and potential vendors do not believe that now is the right time for an exit. Consequently, they are holding on to their assets in the short term until this picture becomes clearer.”
He does, however, have some optimism regarding the longer-term pipeline, commenting:
“The PE houses we speak to do have an appetite for investing in Germany and there are opportunities in the market, but exits will only be successful for quality businesses where price expectations can be met.”
France saw the number of deals completed during Q2 fall to 12, compared with the previous quarter’s 26.
Paul Gerber, Ernst & Young’s PE Leader in France, is seeing the effects of difficult market conditions:
“PE activity in France is being adversely affected by a number of macroeconomic factors including the lack of growth in the French and European economies and limited access to finance.”
“With pricing continuing to be an issue, especially for the secondary leveraged buyout (LBO) market, we expect market conditions to remain challenging in the short term.”
That said, at least France saw an increase in the total value of its deals. It rebounded to €1.3b in Q2 2012 after diving to €0.6b in the first three months of the year, placing it third behind the UK and Sweden in value terms.