Preqin’s Buyout Deals Analyst online service reveals that 2014 was a record year for private equity-backed buyout exits, recording the highest number and aggregate exit value in the period 2006 to present. Last year, there were 1,617 exits valued at a total of $429bn, an increase of 4% in terms of number and 28% in terms of aggregate value on 2013’s figures. The significant increase in private equity-backed buyout exits last year continues a trend which has seen the total number of exits increasing year-on-year since 2010; the aggregate value of exits has also experienced a similar upward trend, with the exception of the slight fall in aggregate value in 2012.
The three largest exits recorded in 2014 were:
- The conclusion of Walgreens two-stage acquisition of Alliance Boots from Ardian, KKR and CPPIB, with the latter part valued at $15bn.
- Blackstone Group, KKR, TPG and Goldman Sachs Merchant Banking Division’s $13.35bn sale of Biomet to Zimmer Holdings.
- The €7.2bn sale of Grupo Corporativo Ono, backed by Quadrangle Group, Providence Equity Partners, Thomas H Lee Partners, JPMorgan Partners and Arle Capital Partners, to Vodafone.
The healthcare sector was the largest contributor to aggregate exit value in 2014, which is unsurprising given that three out of the top 10 largest exits, including the two largest realizations last year, came from portfolio companies operating within this industry. At $83bn, the healthcare industry accounted for 19% of the aggregate value of exits in 2014, a rise of 77% on 2013’s total.
The industrials sector, the most prominent industry with regards to number and aggregate value of private equity-backed buyout exits during 2013, saw a small decline in its market share with regards to aggregate value, from 17% to 16% in 2014. However, at 27%, it remained the largest industry contributor in terms of the number of exits, representing the same proportion as in 2013.
Regional breakdowns of global exit activity show that:
- North America was the only region whose contribution to aggregate exit value as a proportion of the global total decreased (from 57% in 2013 to 49% in 2014). The value of private equity-backed buyout exits in North America increased from $189bn in 2013 to $210bn in 2014.
- Europe witnessed a 41% rise in the aggregate value of exits, from $114bn to $161bn, boosted by the largest exit of 2014, the $15bn sale of Alliance Boots GmbH to Walgreens Co.
- The number of realizations in Asia decreased by 7%, from 163 in 2013 to 152 in 2014, while the aggregate exit value increased by 70%, from $20bn in 2013 to $34bn last year.
- Regions outside North America, Europe and Asia experienced the largest increase (118%) in the total aggregate value of exits, from $11bn to $24bn. The largest exit to occur outside the traditional regions was the $5.7bn sale of South Africa-based Pepkor Holdings Limited to Steinhoff International Holdings. This transaction alone contributed 24% of the aggregate exit value within the Rest of World region.