Large-Cap Private Equity Deals, 2006 - 2015 YTD

by Ciantelle Lawrence

  • 29 Jun 2015
  • PE

Large-cap transactions are defined as private equity-backed buyout deals valued at $1bn or more in size. Preqin’s Buyout Deals Analyst online service shows that there have been 714 large-cap transactions, worth a total value of $2.1tn, since 2006.

During the depths of the financial crisis in 2009, the number of large-cap transactions stood at just 19, totalling $45bn. However, post-2009, fund managers have become increasingly willing to invest larger amounts, and in 2010 the number of such deals increased by 184% from the year before, while the aggregate transaction value increased by 138% to $107bn. Generally, the level of large-cap deals has been increasing since the crisis, with 2014 witnessing a total of 78 large-cap transactions announced, with a value of $183bn.

Since the start of 2015 there have been 39 large-cap deals, at an aggregate value of $136bn. Although the number of large-cap deals has remained at a similar level to H1 2014, aggregate deal value in H1 2015 YTD has surpassed H1 2014’s figure by 52%. This is likely, in part, due to the large $40bn mega merger of The Kraft Heinz Company, which was announced in the first quarter of 2015. Such large-cap transactions have contributed 11% and 73% toward the overall volume and aggregate value of buyout deals in 2015 YTD respectively, as can be seen in the chart below.

In terms of number of deals, leveraged buyout (LBO) transactions have contributed the greatest proportion (46%) of all large-cap deals since the start of 2015; this is in comparison to the 68% that LBOs accounted for in 2014. However, add-on and merger deals have seen a 20 percentage point increase from representing 13% of all large-cap deals in 2014 to 33% in 2015 YTD. 

In terms of specific regions, making up 54% of all large-cap transactions, North America accounts for the greatest proportion of the total number of such deals since 2006. The region also contributed the largest proportion towards aggregate deal value (65%) since 2006. In comparison, Europe represents 36% in terms of number of deals and 28% with regards to the aggregate value of global large-cap deals. 

Investments in portfolio companies operating within the consumer & retail and information technology industries make up the largest proportion of large-cap transactions so far in 2015. These industries each accounted for 18% of the total number of large-cap buyout transactions this year, while contributing 8% and 13% towards aggregate deal value respectively. Portfolio companies operating within the food & agriculture industry attributed the greatest amount towards the aggregate value of all buyout deals over $1bn, largely due to the $40bn mega merger of The Kraft Heinz Company.

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