2016 – Issue 1

Multiple: European Private Equity Watch

European buyout market cooling down after a peak year

Deal activity slowing down as uncertainty spreads into 2016

Exit volume declined also sharply in Q1 with only 91 exits

UK, France and Netherlands the most active markets

Italy, Belgium and Switzerland also hit the €1b mark in Q1

Pipeline for the upcoming months of 2016 looks solid

EY - Multiple: European private equity watch 2016 - Issue 1
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The PE deal market has started the year rather slowly as a combination of volatile capital markets, low oil prices and the Brexit referendum put off potential buyers. The aggregate value of Q1 deals was €12.4b. Although this is down on the €27.6b recorded in the previous quarter it is more in line with the opening quarters of 2014 (€15.1) and 2013 (€14b).

Headlines in 2015

Deal activity at highest level since 2007

  • Total deal value in 2015 was €88.9b, compared with €70.4b in 2014. At 693 deals, volume in 2015 was also up on the 689 recorded in 2014. Improved macroeconomic conditions, strong fundamentals and debt and capital markets brought PE executives to the deal table.

Megadeals drive value

  • The average deal value of new PE-backed buyouts (€128m) in 2015 was also the highest since 2007 (€171m). In 2015 there was €38.7b worth of €1b+ deals.

Record high for European exits

  • At €345.6m, the average value of European exits in 2015 was the highest ever. Total PE-backed buyouts exit value of €159.3b surpassed the €122.6b of total value in 2007.

UK continues its dominant market position

  • The UK accounted for deals totaling €28.7b in 2015 out of the €88.9b total for Europe — this equates to 32% of all European buyout deal value. Germany was the second biggest European buyout market by value (€12.5b) and France the second by volume (102 deals).

Retail and leisure make progress, strong activity in TMT

  • With €9.7b of total deal value in 2015, retail reached its highest total since 2007. Leisure also performed well at €9.4b. TMT had a strong year in terms of deal volume with 108 new buyouts, and the trend is set to continue as TMT accounted for an increasing share of total buyouts in Q1 2016.

 European buyouts – volume and value: at a glance