The European exit market has returned to “pre-crisis levels” this year, driven by a thriving IPO market, according to the latest figures on market activity from the Centre for Management Buyout Research and Equistone Partners Europe.
Exit values for the nine months to the end of September totalled €80.6 billion. That’s already higher than the full-year 2013 total of €79.4 billion, and means that the full-year 2014 total could match or even surpass the market’s previous high watermark – the €121.9 billion of exits recorded in 2007.
The IPO market has been the biggest driver of this exit activity, accounting for almost half (€39.8 billion) of the total exit values across 38 offerings. More than half of these were in London, including the likes of Spire Healthcare, Pets at Home and B&M Retail. By comparison, in 2013, there were just 20 IPOs in the whole year.
According to CMBOR, secondary sales to other private equity groups have accounted for just 26 percent (€21.1 billion) of total exit value in the year to date.
Refinancings have also remained strong, with €36.3 billion of transactions completed in the year to date. That means the full-year total could surpass the €46.3 billion total recorded this year.
However, the total value of new deals – to include buyouts and buy-ins – was just €47.2 billion, only slightly ahead of last year’s equivalent total of €44.2 billion.
“The European private equity market has continued to perform well in Q3 2014 despite the ongoing political uncertainty in the East of the region,” said Christiian Marriott, investor relations partner at Equistone. “In many ways, Europe remains a sellers’ market with high valuations driving a relatively small number of deal processes. That said, there is a strong pipeline of deals in the UK and German mid-market in particular and there is still appetite to pay high multiples for the right assets.”