Deal activity holds up
• The PE deal market has started the year rather slowly. However, a strong end to the quarter meant that Q1 closed with 143 deals completed. This compares with the 135 deals completed in the final quarter of 2013, and the 138 deals wrapped up in the first quarter of last year.
• The aggregate value of this quarter’s deals was €14.3b. Although this is up on the €13.8b recorded in the previous quarter and down on the €20.7b seen in Q3 2013, it is broadly in line with the opening quarters of each of the last four years.
Return of the megadeal
• This quarter has seen two €1b-plus buyouts: the €1.2b Unit4 deal in the Netherlands and Scout24, which achieved an enterprise value of €2b. Considering that there had not been a deal valued at €1b or more since Q3 of last year, it is encouraging that two completed this quarter. Looking ahead to the second quarter, a number of larger deals are in the pipeline, with a significant number originating from Germany.
Lower mid-market struggles
• Q1 2014 confirmed the slowdown in lower mid-market deals (€25 to €100m) seen in Q3 2013. In this range, only 17 deals
equating to €896m were completed — the lowest quarterly numbers for at least four years. This compares with the 30 deals and €1.75b recorded in Q1 2013.
Secondaries suffer as UK IPO market remains strong
• The popularity of the public markets as a preferred exit route continued in the first quarter of this year, with nine IPOs achieving a total value of €9b. This continues from where 2013 left off, with a total €25.1b raised through 20 IPOs. The number of secondary buyout exits fell to 36 in Q1 2014, with a value of just €3b — the lowest volume since Q1 2013 and the lowest value since Q3 2010.
Trade sales rebound as Eurozone settles down
• Trade sale values were strong, at €6.2b in the quarter. This is up substantially on the €4.5b recorded in the previous quarter
and the €5.0b seen in the first quarter of 2013. However, the number of trade sales was down from 37 in the last quarter to 31. The higher average value demonstrates that foreign buyers see European assets as more attractive than they were during the depths of the Eurozone crisis, with 6 of the 10 largest trade sales involving overseas corporate buyers.
Courtesy of EY