European Market on track for record exit value

According to the Centre for Management Buy-out Research data sponsored by Equistone Partners, the year to date has seen a record average exit value of €344.9 million a transaction.

In the first three quarters of the year, the European private equity market has seen a record average exit value of €344.9 million and the market is on track for a record total exit value this year, the Centre for Management Buy-out Research said in a report sponsored by Equistone Partners Europe.

The total value of European exits stood at more than €105.6 billion for the first three quarters of the year, and is expected to surpass the value of realisations in 2007, which was a record year at €122.4 million.

The UK accounted for more than a third of exits, with a quarter in the TMT sector, while retail was the next biggest sector.

Blackstone’s sale of holiday group Center Parcs to Brookfield Property Partners for €3.4 billion was the largest exit in Q3, with the sales of Granvision and Springer Science & Business Media earlier in the year the biggest at around €5 billion each.

However, volatile European stock markets limited initial public offerings from July to September. The number of exits totalled 322 for the first three quarters compared to 485 for the whole of 2014, the report said.

The sale by Inflexion Private Equity to Blackstone of Ideal Shopping Direct announced earlier this month brings the number of realisations that firm has made to 12 over the past 18 months, including four IPOs, as reported by Private Equity International.

The value of secondary buyouts this year, at €30.3 billion, is already higher than the €29.3 billion posted in 2014.

In term of transaction values, the European market is set to reach the highest values seen since 2007, the research said.

There have been €58.4 billion of buyouts this year, of which €20.3 billion were in the third quarter, compared with €68.6 billion for whole of 2014. Record year 2007, saw €172.9 billion of deals.

The UK accounted for 38 percent of deal value this year. There have been 150 UK deals in the year to date, compared to 233 for the whole of 2014. Of the 10 largest deals of the year so far, four were in the UK, comprised of Virgin Active, New Look, ERM and Stemcor Holdings.

The number of deals for the entire year is expected to be less than in 2014, having totalled 462 this year so far compared with 669 for full-year 2014.

At an average value of €126.3 million, the size of deals this year has been the highest since 2007 when the average size was €171 million, the report said. Almost half of deals were €1 billion or more.