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European Private Equity-Backed Buyout Deal Activity 2014 YTD – March 2014

by Catriona McCarron

  • 07 Mar 2014
  • PE

European buyout deals comprise 34% of all private equity-backed buyout deals on average across 2006-2014 YTD, with 2014 YTD following trend at 32% of the total number of global transactions. Preqin’s Buyout Deals Analyst has recorded 141 European private equity-backed buyout deals so far this year with an aggregate value of €6.7bn.

Within Europe, so far this year 70% of private equity-backed buyout deals took place in West Europe, a 12 percentage points decrease from 2013’s figures, while Central and Eastern Europe accounted for 9% of all European transactions, two percentage points less than last year. Meanwhile, Nordic buyout deal activity has seen an increase in the number of transactions in 2014 YTD, contributing 21% to the total number of  European deals; an increase of ten percentage points from 2013.  

In terms of aggregate deal value, countries in the Nordic region have contributed 3% to aggregate deal value in 2014 YTD, a decrease from the 8% seen in 2013. While Central and Eastern Europe’s aggregate transaction value has seen a rise of three percentage points, to a 12% contribution towards the aggregate deal value in Europe with €828mn invested in 2014 YTD, 88% of which, came from CVC Capital partners investment in Avast Software, announced in February 2014 and valuing the company at $1bn (approx. €732mn) including debt.

Regarding investment type, leveraged buyout deals (LBOs) have accounted for a 40% of total number of private equity-backed buyout deals globally in 2014 YTD, with an aggregate value of €19.3bn, or 60% of the global total, invested via this deal type. Within the European space, LBOs have had a greater prominence in 2014 YTD, by committing 58% to total number of transactions and €5.1bn to aggregate deal size (76% of the European total). An example is Fosun International’s acquisition of Portuguese Caixa Seguros e Saúde for €1bn, which saw Fosun International take a majority stake in the insurance provider in January 2014 (largest private equity-backed buyout in Europe 2014 YTD). Meanwhile, the largest buyout transaction witnessed globally in 2014 YTD is the acquisition of Ortho Clinical Diagnostics for $4.15bn announced by investors Carlyle Group in January this year. 

Globally, private equity-backed buyout deals in the industrial segment have been the most prevalent industry to invest in, accounting for 24% of the total number of deals and contributing €6.1bn (approx. $8.4bn), or 19% of the total, to the global aggregate value. This proportion of the market share occupied by the industrials sector is consistent on a regional level, with 28% of Europe-based private equity-backed buyout deals so far this year recorded in this sector. However, in terms of the industry’s contribution to aggregate deal value, only 5% of capital invested in Europe has been directed towards private equity investments in the industrials sector. Conversely, the information technology and healthcare industries are experiencing increases in proportion of their respective aggregate deal values, despite decreases in the number of deals by two percentage points each, compared with 2013. Business services are holding a strong position, commanding 41% of the total European aggregate deal size in 2014 YTD.

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