Country spotlight

In the UK, the combined deal value reached €4.2b from 35 deals, whereas in Germany, total deal value reached nearly €3.2b, though more than half of this was a result of one mega deal.

While key markets elsewhere in Europe have struggled, the UK market has held up. With nearly €14.5b of deals completed so far this year, it represents 40% of the overall European market.

UK

The total value of deals in the UK during the first nine months of 2012 has already almost equaled the value for the whole of last year. While key markets elsewhere in Europe have struggled, the UK market has held up.

With nearly €14.5b of deals completed so far this year, it represents some 40% of the overall European market. By number, the 148 UK deals represented 36% of all European deals. Last year, the UK was narrowly squeezed into second place by a buoyant French market, but that trend has been reversed.

“UK buyout activity is holding up well, in relative terms, with both the value and number of deals over the last three quarters nearing the total over the same period in 2011. It is encouraging to see that values are being boosted, not only by one off mega deals, but a healthy spread of transactions across the value range.” - Sachin Date, EMEIA Private Equity Leader, Ernst & Young

France

After a slow second quarter, activity in the French buyout market has picked up again, certainly in terms of volume if not value, compared to previous years. During the third quarter, there were 36 deals with a total value of €2.2b.

However, a similar number of deals for the same quarter last year saw a combined valuation of €6.4b. Alain Afflelou, the French eyewear retail chain, was the largest buyout of the quarter, and indeed the year, valued at €800m.

“Due to macroeconomics uncertainty, tax threats from the new government and reduction in the availability of credit, French PE funds are extremely cautious in terms of new investments, except for add-on acquisitions on their best performing portfolio companies. GPs teams are essentially focused on portfolio management and refinancing needs, in particular regarding the companies acquired at high prices between 2005 and 2007.” - Paul Gerber, Private Equity Leader, Ernst & Young, France

Netherlands

The Dutch markets are proving sluggish during 2012. Over the first nine months of the year, 22 deals have been completed, with a combined value of some €549m, less than a tenth of the total value for the 36 deals completed in 2011 (€5.5b).

“The typical Dutch PE houses are focused on the mid market, which has been slowing down driven by a lower number of good opportunities in combination with sellers’ price expectations and limited access to finance. The deal volume with an enterprise value below €100m has been relatively strong recently. We expect these developments to continue in the coming period.” - Maurice van den Hoek, Private Equity Leader, Ernst & Young, Netherlands

Germany

With just one mega deal so far this year, BSN Medical (€1.8b), the German market continues to underperform, reflecting wider concerns about the Eurozone and difficulties in the local debt market. With the exception of Q1 2011, the number of deals per quarter has stuck in the 11–19 range since the end of 2008. Total value reached nearly €3.2b during Q3 2012, though more than half of this was a result of the BSN deal.

“The market continues to be extremely volatile and in the last six months we’ve seen deals such as Schenck fail to complete because of price expectations. However, interest from China has resulted in some successful deals such as Kion, Oxea signed KraussMaffei, or BC signed Aenova. Although the market is slow there are further deals in the pipeline and we wait to see if these will turn into successful deals by the end of the year.” - Stefan Ostheim, TAS Private Equity Leader, Ernst & Young, Germany