Significant Increase in Value of Trade Sale Exits from Europe-Based Private Equity-Backed Companies

by Ciantelle Lawrence

  • 13 Nov 2014
  • PE

Preqin’s Buyout Deals Analyst shows that divestments of Europe-based, private equity-backed portfolio companies have, through trade sale transactions, accounted for 56% of the aggregate value of all private equity-backed exits within the region in 2014 to date. This represents an increase of 21 percentage points since 2013. In contrast, with a total of 225 trade sale exit transactions completed in 2014 YTD, at a value of €60.4bn, the number of trade sales as a proportion of all exits from Europe-based portfolio companies stands four percentage points lower than in 2013, at 47% in 2014.

While the proportion of the number of exits accounted for by trade sales has been relatively stable since 2006, aggregate value of trade sales has been much more volatile; aggregate value peaked at 70% of that of Europe-based exits in 2009, and reached its lowest point of 35% in the years 2006, 2010 and 2013. This exit strategy remains key for investors in the region; in the period 2006 - 2014 YTD, trade sales have accounted for 53% of the number and 48% of the aggregate value of all exits for portfolio companies based in Europe.

Preqin data demonstrates that industrials have accounted for the highest proportion of trade sale exits in Europe in 2014 YTD by number, at 24%. However, in terms of aggregate exit value, portfolio companies operating within the healthcare industry rank highest, at 33%. This is likely to be attributed to the sale of Alliance Boots – a Swiss pharmaceutical and health & beauty company – which was owned by KKR, Ardian and CPP Investment Board and sold for $15bn in August this year. Since 2013, the healthcare industry has seen a 22% increase in terms of the contribution of trade sale exits towards total European exit value in this sector.

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