Private Equity-Backed Trade Sale Exits in Europe - August 2015

by Ciantelle Lawrence

  • 11 Aug 2015
  • PE

Following the recent announcement of private equity-backed, Switzerland-based company Swissport being acquired by HNA Group Company Limited for CHF 2.73bn ($2.8bn), Preqin’s Buyout Deals Analyst takes a look at the prominence of trade sale transactions* in Europe, which remain a key exit strategy for fund managers.

Since the start of 2015, there have been a total of 445 trade sale exits valued at $173bn globally; these exits accounted for nearly half (48%) of all exit transactions and 64% of aggregate exit value. This type of exit was also the most prominent in Europe; such exits have accounted for 48% of all private equity-backed exits in Europe and contributed just over half of the aggregate exit value (53%) in 2015 YTD.

As can be seen in the chart below, the number of trade sale exits as a proportion of all Europe-based exits has been relatively stable across the 10-year period and has consistently accounted for the largest proportion of all private equity-backed exits across Europe each year since 2006. In contrast, the aggregate value of trade sales as a proportion of all Europe-based exits has been more volatile, reaching its lowest point at 33% in 2007 and peaking at 70% in 2009.

With regards to the geographic breakdown of trade sales in Europe, the UK unsurprisingly ranked highest at 25% of all trade sale exits in Europe in terms of number of exits, with 38% of the aggregate exit value. France ranked second in regards to the number of trade sales with 12% of the total, yet trade sales in Spain put the country in second position for aggregate exit value. This is largely due to the largest trade sale exit in Europe in 2015 YTD involving Spain-based Santander Asset Management.  General Atlantic and Warburg Pincus-backed Santander Asset Management announced its merger with the asset management arm of Unicredit Group in April 2015. The merged group is valued at an estimated €5.5bn.

Preqin data demonstrates that portfolio companies operating within the industrials sector have accounted for the largest proportion of trade sale exits in Europe in 2015 YTD in terms of number (22%) and aggregate exit value (27%). This represents a drop of 12 percentage points from the 34% that industrials accounted for in 2006 in terms of number, but an increase of 11 percentage points in value over the same time period. The largest proportional increase in the number of European trade sale exits was witnessed in the information technology sector, from 6% of all trade sale exits in the region in 2006 to 20% in 2015 YTD.

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