Multiple: European buyouts watch January 2013
There were a number of standout transactions in the telecommunication, media and technology (TMT) sector during 2012. The healthcare sector clocked another active year and total deal value increased significantly compared to 2011. The manufacturing sector was the second highest in terms of value, only slightly behind the business services sector which led the market.
“Deals on the whole have been more strategic and less speculative as you would expect. Larger players have rationalized their portfolios seeking to redeploy cash to higher growth jurisdictions or making returns to the shareholders." - Rhys Phillip, Head of Transaction Advisory Services for the Telecommunications Sector
Some of the major transactions in 2012 include the buyout of Orange Communications in Switzerland for €1.6b and the marginally smaller Misys public-to-private deal (€1.57b), both completed in the first half of the year. The year in the TMT sector rounded off with the €938m secondary buyout of Denmark’s KMD, the IT provider.
In total, the sector saw 80 deals completed, with a combined value of some €8.3b — up on the previous year’s 73 deals valued at €7b.
Manufacturing companies accounted for 27% (152) of all deals completed during the year. This is a similar figure to the 29% (180) recorded in 2011. The manufacturing sector was the second highest in terms of value, only slightly behind the business services sector.
The combined value of manufacturing deals reached €8.7b in 2012, compared with business services’ €9.5b.
The business services sector continued to dominate the market in terms of deal value and volumes. Contributing to this leading position is the estimated €1.1b secondary buyout of Acteon, the UK specialist engineer, that was completed by KKR during the fourth quarter of the year.
It was another active year in the healthcare sector, with a total deal value of €7.5b. This was significantly up on the €4.7b recorded in 2011. Value rose despite the volume of deals remaining very similar. There were 38 in 2012 compared with 37 in 2011. Germany’s BSN was the largest deal by value, completing in the third quarter of the year with a valuation of more than €1.8b.
Last year saw a reduction in the number of Financial Services (FS) PE transactions completed down from 28 to 18. Throughout 2012, FS transactions were taking significantly longer to complete. But, more often than not, they were being pulled altogether part-way through a process. This was due to a lack of appropriate purchaser appetite relative to vendor price expectations.
Largest European buyouts 2012
Source: CMBOR; Equistone Partners Europe; Ernst & Young×