Private equity realises value in strong European exit market in 2013
DGAP-News: Equistone Partners Europe / Schlagwort(e):
Marktbericht/Private Equity
Private equity realises value in strong European exit market in 2013
02.01.2014 / 09:04
---------------------------------------------------------------------
Value of European private equity exits via IPO highest on record
There was a notable resurgence in the European private equity exit market
in Europe in 2013 which saw the value of exits at its second highest annual
total for six years at EUR73.9bn , up 26% on 2012's total of EUR55.4bn, but
down 11% on 2011's value of EUR83.1bn, according to the latest data
published by the Centre for Management Buyout Research (CMBOR), sponsored
by Equistone Partners Europe Limited and EY.
Overall activity in the European buyout market was robust but slightly
slower than 2012. There were 521 private equity-backed deals completed in
Europe with a total value of EUR50.3bn in 2013, a decrease of 7% on 2012
(EUR54.2bn) and the lowest in value since 2009 (EUR20.0bn). Similarly,
private equity deal activity as a proportion of overall M&A in Europe by
value fell slightly to 10% in 2013 (Source Dealogic) from 12% in 2012, as
corporate M&A activity picked up.
Highlights
Exit market performs well; value of exits via IPO at highest ever recorded
total
- There was less capital invested by private equity than there was
realised in Europe in 2013 causing private equity exits to outstrip the
level of investments completed by EUR23.6bn.
- Boosted by a growing confidence in current economic conditions and
bullish markets, the value of exits by IPO reached a record level of
EUR25.0bn from 20 flotations in 2013, up from just one IPO of EUR3.7bn
in 2012. The IPO of Merlin Entertainments Group in November 2013 was
the largest of 2013 at EUR3.8bn.
Refinancing back to pre-crisis levels
- A 2013 trend has been the recovery in the refinancing of private equity
assets; both the number of refinancings, 129 (2012: 96), and aggregate
value of refinancings, EUR43.0bn (2012: EUR24.9bn), were at the highest
level since 2007.
UK and Germany leading European private equity markets
- Deal flow in Germany and the UK accounted for 55% of value for the
total European buyout market in 2013. Private equity buyout activity in
the UK was valued at EUR16.0bn from 183 deals in 2013; Germany had 64
deals worth a total of EUR11.6bn.
- France's total buyout value of EUR6.6bn in 2013 was down 57% on its
performance in 2011 when it led Europe in both the value and volume of
private equity backed transactions. Despite the expected resurgence of
French deal activity in 2013, the country fell further behind its
neighbours Germany and the UK as further uncertainties around the
country's fiscal policy took hold of market confidence.
Christiian Marriott, Investor Relations Director at Equistone Partners
Europe Limited, said:
'The exit market has been strong in 2013. There has been a very significant
pick up in IPO activity for private equity-backed companies and a healthy
number of strategic acquirers from outside Europe.
'It is encouraging to see an increase in the availability of funding from
the debt market which is evident both in the high value of refinancings and
an encouraging level of deal activity in 2013. Sources of debt are becoming
more diverse and it is encouraging specialist debt funds and other
unitranche providers reaching down into mid-market buyouts, mitigating the
reliance of buyout funds on clubs of lenders.
'However, despite the many positive signs, especially the IPO market, we
are still a long way off pre-crisis levels of deal activity and leverage in
Europe. New buyout activity still remains below last year's numbers both in
volume and total value, and leverage for the vast majority of deals remains
below the levels seen in the mid-2000s.'
Sachin Date, Private Equity Leader for Europe, Middle East, India and
Africa (EMEIA) at EY, commented:
'Private equity enters 2014 feeling more optimistic than it has done for a
number of years. This optimism partly stems from the reopening of the IPO
window. While public listings have been a viable exit route in the US for
some 18 to 24 months, it has only been in the last year that IPO investors
have begun welcoming new issues from Europe's listed companies. Private
equity has been quick to capitalise on this shift in sentiment.
'When we look at the Top Ten Exits so far in 2013 we see that there have
been seven IPOs, two secondary buyouts and only one trade sale. For the
market to significantly improve in 2014 all three exit routes need to
function efficiently. While it is positive news that IPOs and secondaries
are working well, the challenge remains how to engage with European
corporate players. Private equity houses need to work harder to convert
their growing confidence into action to get the market firing on all
cylinders again.
'As economic prospects continue to improve, the European private equity
market is clearly making the most of the good conditions for exiting and
returning capital to investors. However, it will need to be more
innovative, looking further afield in its hunt for both new investment
opportunities and corporate buyers, if it is to continue to deliver the
strong returns it has historically been able to achieve.'
Strong European exit market
- For the fourth year running, the exit market has outstripped the buyout
market in Europe: EUR73.9bn worth of exits were completed in 2013 in
comparison to EUR50.3bn of new deals.
- The exit market in the UK performed well in 2013 with a total exit
value of EUR25.9bn, accounting for 35% of the overall exit market in
Europe, greater than the combined value of the German and French exit
markets: Germany (EUR14.6bn) and France (EUR6.9bn). However, the UK
exit market is still performing well below its pre-financial crisis
height of EUR38.8bn recorded in 2006.
- By sector, manufacturing was the most active for exits in Europe in
2013 accounting for 102 of the total number of deals (378). There was
an increase in the manufacturing sector's exit value from EUR12.1bn in
2012 to EUR14.8bn in 2013.
Buoyant lending market in 2013
- The average proportion of debt used to finance European deals in 2013
was at its highest level since 2008 at 40% (up from 29% in 2012).
Additionally, the proportion of debt used to finance deals of over
EUR100m in value increased to 51% (2012: 38%). This is the first time
since 2007 that it has accounted for the majority of financing in deals
of over EUR100m in value, demonstrating an upturn in the availability
of funding.
- The average amount of equity used to finance private equity deals in
Europe in 2013 decreased to 53% from 66% in 2012. However, despite this
fall, the ratio of equity employed remains well above the 'boom' levels
of 2006 when the average proportion of equity was just 39% for all
deals.
UK leads European buyout market; France falls behind European neighbours
- Despite a 21% fall in the total value of deals in the UK to EUR16.0bn
in 2013 (2012: EUR20.3bn), the UK buyout market accounted for 32% of
overall value of buyouts in Europe in 2013 and remains more active than
Germany, which had 64 deals totalling EUR11.6bn in value. Prominent
UK-based buyouts in 2013 included B&M Retail, in January, valued at
EUR1.1bn, and Vue Entertainment, in August, also valued at EUR1.1bn.
- Of the 10 largest buyouts in Europe in 2013, only one was a French
transaction: Allflex, acquired by BC Partners for EUR985m.
Comparatively, four of the 10 largest European buyouts were German, the
biggest of which was the acquisition of Springer Science & Business
Media by BC Partners in Q3 2013, valued at EUR3.3bn.
- Buyout activity in Norway picked up in 2013; a total deal value of
EUR3.0bn was recorded - more than double its 2012 total value of
EUR1.4bn and three times its 2011 total value of EUR988m. However, over
a third of Norway's total value can be attributed to the Aibel deal in
Q2 2013, which was valued at EUR1.2bn.
Secondary transactions dominant; few mega-deals
- Secondary transactions continued to be a dominant deal source in Europe
in 2013 as private equity houses continued to support portfolio
companies in moving up the value chain. The total value of secondary
buyouts in Europe accounted for 61% of private equity backed
transactions, totalling EUR30.6bn, compared to 48% in 2012.
- Despite a subtle drop in the number of buyouts sourced from foreign
divestment in 2013 (47 compared to 53 in 2012), the total value of
foreign divestment transactions fell by 55% from EUR7.2bn in 2012 to
EUR3.2bn in 2013, indicating overseas interest in mid-market assets.
- The total number of mega-deals (over EUR1bn) completed in Europe in
2013 is at both the second lowest volume and value in the past decade
(only 2009 was lower), with only nine deals completed this year at a
total value of EUR15.0bn. This is just a quarter of the number of
mega-deals seen in the pre-financial crisis peak when 36 mega-deals
were completed across Europe in both 2006 and 2007.
- Ends -
Notes to Editors
Methodology
The data compiled by CMBOR summarises trends in buyouts* across Europe
(Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Czech Republic,
Hungary, Poland, Romania and Turkey and the UK).
The data in this press release is for deals completed by or on 20 December
2013.
*Buyouts: CMBOR defines buyouts as over 50% of shares changing ownership
with management or private equity, or both having a controlling stake upon
deal completion. Equity funding must primarily be from private equity funds
and the bought-out company must have its own financing
structure, e.g., MBO/MBI.
About Equistone Partners Europe
- Equistone Partners Europe Limited is an independent investment firm
owned and managed by the former executives of Barclays Private Equity.
- In January 2013, Equistone successfully completed the final closing of
Equistone Partners Europe Fund IV with total capital commitments of
EUR1.5bn.
- The Company is one of Europe's leading investors in mid-market buyouts
with a successful track record spanning over 30 years, with more than
350 transactions completed in this period.
- Equistone has a strong focus on change of ownership deals and aims to
invest between EUR25m and EUR125m of equity in businesses with
enterprise values of between EUR50m and EUR300m.
- The Company has a team of 36 investment professionals operating across
France, Germany, Switzerland and the UK, investing as a strategic
partner alongside management teams.
- Equistone Partners Europe Limited is authorised and regulated by the
Financial Conduct Authority.
- For further information, please visit www.equistonepe.com
About EY
EY is a global leader in assurance, tax, transaction and advisory services.
The insights and quality services we deliver help build trust and
confidence in the capital markets and in economies the world over. We
develop outstanding leaders who team to deliver on our promises to all of
our stakeholders. In so doing, we play a critical role in building a better
working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the
member firms of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. For more information about
our organization, please visit ey.com.
About CMBOR
The Centre for Management Buyout Research (CMBOR) was founded in 1986 and
moved to Imperial College Business School in 2011. CMBOR is world-renowned
as the long-standing leader in providing robust analysis of the buyout
market. CMBOR data covers all buyout activity and therefore includes
transactions funded on a cash or debt-only basis as well as traditional
private equity-funded buyouts. CMBOR is independently sponsored by
Equistone Partners Europe Limited and EY.
Ende der Finanznachricht
---------------------------------------------------------------------
02.01.2014 Veröffentlichung einer Corporate News/Finanznachricht,
übermittelt durch die DGAP - ein Unternehmen der EQS Group AG.
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber
verantwortlich.
Die DGAP Distributionsservices umfassen gesetzliche Meldepflichten,
Corporate News/Finanznachrichten und Pressemitteilungen.
Medienarchiv unter http://www.dgap-medientreff.de und
http://www.dgap.de
---------------------------------------------------------------------
246623 02.01.2014
DGAP-News: Equistone Partners Europe / Schlagwort(e):
Marktbericht/Private Equity
Private equity realises value in strong European exit market in 2013
02.01.2014 / 09:04
---------------------------------------------------------------------
Value of European private equity exits via IPO highest on record
There was a notable resurgence in the European private equity exit market
in Europe in 2013 which saw the value of exits at its second highest annual
total for six years at EUR73.9bn , up 26% on 2012's total of EUR55.4bn, but
down 11% on 2011's value of EUR83.1bn, according to the latest data
published by the Centre for Management Buyout Research (CMBOR), sponsored
by Equistone Partners Europe Limited and EY.
Overall activity in the European buyout market was robust but slightly
slower than 2012. There were 521 private equity-backed deals completed in
Europe with a total value of EUR50.3bn in 2013, a decrease of 7% on 2012
(EUR54.2bn) and the lowest in value since 2009 (EUR20.0bn). Similarly,
private equity deal activity as a proportion of overall M&A in Europe by
value fell slightly to 10% in 2013 (Source Dealogic) from 12% in 2012, as
corporate M&A activity picked up.
Highlights
Exit market performs well; value of exits via IPO at highest ever recorded
total
- There was less capital invested by private equity than there was
realised in Europe in 2013 causing private equity exits to outstrip the
level of investments completed by EUR23.6bn.
- Boosted by a growing confidence in current economic conditions and
bullish markets, the value of exits by IPO reached a record level of
EUR25.0bn from 20 flotations in 2013, up from just one IPO of EUR3.7bn
in 2012. The IPO of Merlin Entertainments Group in November 2013 was
the largest of 2013 at EUR3.8bn.
Refinancing back to pre-crisis levels
- A 2013 trend has been the recovery in the refinancing of private equity
assets; both the number of refinancings, 129 (2012: 96), and aggregate
value of refinancings, EUR43.0bn (2012: EUR24.9bn), were at the highest
level since 2007.
UK and Germany leading European private equity markets
- Deal flow in Germany and the UK accounted for 55% of value for the
total European buyout market in 2013. Private equity buyout activity in
the UK was valued at EUR16.0bn from 183 deals in 2013; Germany had 64
deals worth a total of EUR11.6bn.
- France's total buyout value of EUR6.6bn in 2013 was down 57% on its
performance in 2011 when it led Europe in both the value and volume of
private equity backed transactions. Despite the expected resurgence of
French deal activity in 2013, the country fell further behind its
neighbours Germany and the UK as further uncertainties around the
country's fiscal policy took hold of market confidence.
Christiian Marriott, Investor Relations Director at Equistone Partners
Europe Limited, said:
'The exit market has been strong in 2013. There has been a very significant
pick up in IPO activity for private equity-backed companies and a healthy
number of strategic acquirers from outside Europe.
'It is encouraging to see an increase in the availability of funding from
the debt market which is evident both in the high value of refinancings and
an encouraging level of deal activity in 2013. Sources of debt are becoming
more diverse and it is encouraging specialist debt funds and other
unitranche providers reaching down into mid-market buyouts, mitigating the
reliance of buyout funds on clubs of lenders.
'However, despite the many positive signs, especially the IPO market, we
are still a long way off pre-crisis levels of deal activity and leverage in
Europe. New buyout activity still remains below last year's numbers both in
volume and total value, and leverage for the vast majority of deals remains
below the levels seen in the mid-2000s.'
Sachin Date, Private Equity Leader for Europe, Middle East, India and
Africa (EMEIA) at EY, commented:
'Private equity enters 2014 feeling more optimistic than it has done for a
number of years. This optimism partly stems from the reopening of the IPO
window. While public listings have been a viable exit route in the US for
some 18 to 24 months, it has only been in the last year that IPO investors
have begun welcoming new issues from Europe's listed companies. Private
equity has been quick to capitalise on this shift in sentiment.
'When we look at the Top Ten Exits so far in 2013 we see that there have
been seven IPOs, two secondary buyouts and only one trade sale. For the
market to significantly improve in 2014 all three exit routes need to
function efficiently. While it is positive news that IPOs and secondaries
are working well, the challenge remains how to engage with European
corporate players. Private equity houses need to work harder to convert
their growing confidence into action to get the market firing on all
cylinders again.
'As economic prospects continue to improve, the European private equity
market is clearly making the most of the good conditions for exiting and
returning capital to investors. However, it will need to be more
innovative, looking further afield in its hunt for both new investment
opportunities and corporate buyers, if it is to continue to deliver the
strong returns it has historically been able to achieve.'
Strong European exit market
- For the fourth year running, the exit market has outstripped the buyout
market in Europe: EUR73.9bn worth of exits were completed in 2013 in
comparison to EUR50.3bn of new deals.
- The exit market in the UK performed well in 2013 with a total exit
value of EUR25.9bn, accounting for 35% of the overall exit market in
Europe, greater than the combined value of the German and French exit
markets: Germany (EUR14.6bn) and France (EUR6.9bn). However, the UK
exit market is still performing well below its pre-financial crisis
height of EUR38.8bn recorded in 2006.
- By sector, manufacturing was the most active for exits in Europe in
2013 accounting for 102 of the total number of deals (378). There was
an increase in the manufacturing sector's exit value from EUR12.1bn in
2012 to EUR14.8bn in 2013.
Buoyant lending market in 2013
- The average proportion of debt used to finance European deals in 2013
was at its highest level since 2008 at 40% (up from 29% in 2012).
Additionally, the proportion of debt used to finance deals of over
EUR100m in value increased to 51% (2012: 38%). This is the first time
since 2007 that it has accounted for the majority of financing in deals
of over EUR100m in value, demonstrating an upturn in the availability
of funding.
- The average amount of equity used to finance private equity deals in
Europe in 2013 decreased to 53% from 66% in 2012. However, despite this
fall, the ratio of equity employed remains well above the 'boom' levels
of 2006 when the average proportion of equity was just 39% for all
deals.
UK leads European buyout market; France falls behind European neighbours
- Despite a 21% fall in the total value of deals in the UK to EUR16.0bn
in 2013 (2012: EUR20.3bn), the UK buyout market accounted for 32% of
overall value of buyouts in Europe in 2013 and remains more active than
Germany, which had 64 deals totalling EUR11.6bn in value. Prominent
UK-based buyouts in 2013 included B&M Retail, in January, valued at
EUR1.1bn, and Vue Entertainment, in August, also valued at EUR1.1bn.
- Of the 10 largest buyouts in Europe in 2013, only one was a French
transaction: Allflex, acquired by BC Partners for EUR985m.
Comparatively, four of the 10 largest European buyouts were German, the
biggest of which was the acquisition of Springer Science & Business
Media by BC Partners in Q3 2013, valued at EUR3.3bn.
- Buyout activity in Norway picked up in 2013; a total deal value of
EUR3.0bn was recorded - more than double its 2012 total value of
EUR1.4bn and three times its 2011 total value of EUR988m. However, over
a third of Norway's total value can be attributed to the Aibel deal in
Q2 2013, which was valued at EUR1.2bn.
Secondary transactions dominant; few mega-deals
- Secondary transactions continued to be a dominant deal source in Europe
in 2013 as private equity houses continued to support portfolio
companies in moving up the value chain. The total value of secondary
buyouts in Europe accounted for 61% of private equity backed
transactions, totalling EUR30.6bn, compared to 48% in 2012.
- Despite a subtle drop in the number of buyouts sourced from foreign
divestment in 2013 (47 compared to 53 in 2012), the total value of
foreign divestment transactions fell by 55% from EUR7.2bn in 2012 to
EUR3.2bn in 2013, indicating overseas interest in mid-market assets.
- The total number of mega-deals (over EUR1bn) completed in Europe in
2013 is at both the second lowest volume and value in the past decade
(only 2009 was lower), with only nine deals completed this year at a
total value of EUR15.0bn. This is just a quarter of the number of
mega-deals seen in the pre-financial crisis peak when 36 mega-deals
were completed across Europe in both 2006 and 2007.
- Ends -
Notes to Editors
Methodology
The data compiled by CMBOR summarises trends in buyouts* across Europe
(Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Czech Republic,
Hungary, Poland, Romania and Turkey and the UK).
The data in this press release is for deals completed by or on 20 December
2013.
*Buyouts: CMBOR defines buyouts as over 50% of shares changing ownership
with management or private equity, or both having a controlling stake upon
deal completion. Equity funding must primarily be from private equity funds
and the bought-out company must have its own financing
structure, e.g., MBO/MBI.
About Equistone Partners Europe
- Equistone Partners Europe Limited is an independent investment firm
owned and managed by the former executives of Barclays Private Equity.
- In January 2013, Equistone successfully completed the final closing of
Equistone Partners Europe Fund IV with total capital commitments of
EUR1.5bn.
- The Company is one of Europe's leading investors in mid-market buyouts
with a successful track record spanning over 30 years, with more than
350 transactions completed in this period.
- Equistone has a strong focus on change of ownership deals and aims to
invest between EUR25m and EUR125m of equity in businesses with
enterprise values of between EUR50m and EUR300m.
- The Company has a team of 36 investment professionals operating across
France, Germany, Switzerland and the UK, investing as a strategic
partner alongside management teams.
- Equistone Partners Europe Limited is authorised and regulated by the
Financial Conduct Authority.
- For further information, please visit www.equistonepe.com
About EY
EY is a global leader in assurance, tax, transaction and advisory services.
The insights and quality services we deliver help build trust and
confidence in the capital markets and in economies the world over. We
develop outstanding leaders who team to deliver on our promises to all of
our stakeholders. In so doing, we play a critical role in building a better
working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the
member firms of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. For more information about
our organization, please visit ey.com.
About CMBOR
The Centre for Management Buyout Research (CMBOR) was founded in 1986 and
moved to Imperial College Business School in 2011. CMBOR is world-renowned
as the long-standing leader in providing robust analysis of the buyout
market. CMBOR data covers all buyout activity and therefore includes
transactions funded on a cash or debt-only basis as well as traditional
private equity-funded buyouts. CMBOR is independently sponsored by
Equistone Partners Europe Limited and EY.
Ende der Finanznachricht
---------------------------------------------------------------------
02.01.2014 Veröffentlichung einer Corporate News/Finanznachricht,
übermittelt durch die DGAP - ein Unternehmen der EQS Group AG.
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber
verantwortlich.
Die DGAP Distributionsservices umfassen gesetzliche Meldepflichten,
Corporate News/Finanznachrichten und Pressemitteilungen.
Medienarchiv unter http://www.dgap-medientreff.de und
http://www.dgap.de
---------------------------------------------------------------------
246623 02.01.2014