The third quarter of 2014 displayed a level of strength and consistency in terms of private equity deals, with the amount of deals reaching 825 with an aggregate deal value of $85.2bn. Both of these figures represent an increase on the previous quarter, where 821 deals were completed at a value of $80.4bn. Preqin’s Buyout Deals Analyst reveals that the majority of industries maintained a similar level of deal flow in terms of number of deals between Q2 and Q3 2014. There were, however, marked changes in aggregate deal size, with the global value of deals in the energy & utilities industry more than doubling from $7.2bn in Q2 2014 to $15.1bn in Q3 2014. As a result, the sector accounted for 18% of the total aggregate deal value in Q3 compared to just 9% in the second quarter of 2014.
It should be noted that the consumer & retail sector also witnessed a significant increase in aggregate deal value over the same time period, however this was driven mostly by the $11.5bn marquee acquisition of Tim Hortons’ Inc. by 3G Capital-backed Burger King. The rise in aggregate value in the energy & utilities sector, on the other hand, can be attributed to a higher proportion of large private equity backed-buyouts occurring in Q3 2014. Approximately 67% of the deals recorded in this sector in Q3 had a transaction value of $250m or more, compared to 39% in the consumer & retail sector. The average deal size in the energy & utilities industry was $360mn in Q2 2014, while the corresponding value for Q3 2014 stands at $559mn.
In terms of geography, there were 35 deals in North America for both Q2 2014 and Q3 2014, although the aggregate deal value increased from $3.4bn to $6.4bn. China and the Nordic region also saw large aggregate deal values in Q3 2014, though this is more likely due to several large one-off deals, such as those displayed in the table above. The consortium-led buyout of Sinopec Marketing Co., Ltd represents the largest private equity backed-buyout of an energy & utilities firm in Asia in the period 2006 to present. As a result, in the third quarter of 2014 Asia recorded its highest aggregate deal value in the energy & utilities sector for the period 2006 to present.