Big deals boost performance data

According to EVCA, large LBOs were the main driver of European private equity in Q3, masking a 23 per cent decline in the number of done deals.

European private equity investment increased by 24 per cent in the third quarter, boosted by an array of large multinational disposals across the continent, according to the latest figures published by the European Venture Capital Association (EVCA).

According to the EVCA Quarterly Activity Indicator, published in conjunction with PricewaterhouseCoopers and Venture Economics, a total of E6.3bn of private equity was invested in 1,055 companies in the three months to September 30, against E5.1bn invested in the previous quarter.

E4.3bn was invested in buyout stage companies in Q3, almost 70 per cent of the total. This came in spite of a 23 per cent fall in buyout transactions as compared with the previous quarter. The average amount invested per company at buyout stage rose from E26.1m in Q2 to E37.8m in Q3, with five investments accounting nearly 30 per cent of total capital investment.

Expansion investment accounted for E1.3bn in Q3, 21.3 per cent of the overall total and an increase of 26 per cent on Q2. Amounts invested in early stage grew by 21 per cent to E417m, although the number of companies benefiting from early stage investment actually fell to 359 from 394 the previous quarter. 

The quarter was typified by a succession of multi-billion Euro transactions in July and August. Deals included Madison Dearborn’s E3.7bn public to private offer for Irish packaging firm Jefferson Smurfit, and Kohlberg Kravis Roberts’ E3.7bn acquisition of Legrand, which was confirmed today following Scheider Electric’s decision not to pursue its anti-competition case through the courts. Charterhouse acquired UK bookmaker Coral for E1.4bn from Morgan Grenfell Private Equity. 

Fundraising showed a marked improvement on the previous quarter, which at E3.5bn was up 72 per cent. The total amount raised in Q3 was still lower than the E5.4bn raised in Q1. E3bn was sourced for independent vehicles in Q3, a three-fold increase on the amount raised in Q2. The E348m raised by captive funds in Q3 was 40 per cent lower than the amount raised in Q2.

Trade sales remained the most significant route to exit and accounted for just under 30 per cent of total divestment at cost (E434m), a five per cent decrease as compared with the previous quarter. Write-offs continued to loom large for investors in Q3 (E342m), but fell by 18 per cent on the previous quarter.