Private Equity-Backed Exits Update, H1 2013 – July 2013

by Jessica Hull

  • 04 Jul 2013
  • PE

In H1 2013, 637 private equity-backed exits were announced globally with an aggregate value of $142.7bn; this represents a 3% increase and 4% decrease in the aggregate exit number and value respectively compared to H2 2012. Nearly two-thirds (65%) of the aggregate exit value in the first half of the year was attributed from Q2 2013, in which 330 private equity-backed exits took place with an aggregate exit value of $90.1bn. Q2 2013 has witnessed one of the highest aggregate exit values of any quarter in the period 2006 to present, second only to Q2 2011 where 364 exits valued at $127.7bn. The most notable private equity-backed exit of Q2 2013 was the acquisition of Bausch & Lomb by Valeant Pharmaceuticals for $8.7bn from Warburg Pincus, which previously acquired the company during the buyout-boom era for $4.58bn.

Of the 637 private equity-backed exits that took place in H1 2013, 141 of these were initial public offerings or follow-on share offerings, which is the highest number of exits of this type in any half year in the period from 2006 to present. An increased confidence in the public markets and an improvement in market conditions have likely both attributed to the record number of exits via the public market in H1 2013.

H1 2013 witnessed a 17% drop in the number of private equity-backed exits that took place in North America in comparison to H2 2012. Europe, on the other hand experienced a 25% increase in the number of private equity-backed exits in comparison to the second half of 2012. Asia and other economies outside of North America and Europe experienced a gain in the number of exits in the first half of 2013, rebounding to similar levels witnessed in the first half of 2012.

A continual flow of successful exits is vital for the private equity industry, as the returns reaped from sales of portfolio companies allow fund managers to make distributions to LPs, who expect a return on the capital they have invested. With a greater number of exits and consequently distributions to LPs, this is likely to fuel new fund raises as investors will have more capital to contribute to new funds. As long as the increased confidence in the global economy continues, the exit landscape is likely to remain positive, which has especially been witnessed in the Europe in the first half of this year.

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