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European PE posts highest Q1 exit values since 2007

CMBOR research shows European deal value also recorded its highest opening quarter since Q1 2008

European private equity posted its best first quarter for exits by value since Q1 2007 and the highest deal value for an opening quarter since Q1 2008, according to data published by the Centre for Management Buyout Research.

According to the research, sponsored by pan-European house Equistone Partners Europe, a total of €29.5 billion worth of exits were completed in Europe in Q1 2015, up from €20.1 billion for the same period the previous year. This is the highest first quarter since 2007, when a total of €30.2 billion worth of exits were completed.

There have been 95 European exits completed so far this year, with secondary buyouts – the most popular method – accounting for 46 transactions. IPOs accounted for 14, while 27 exits were trade sales. IPOs were the exit route for seven of the 10 largest exits by value this year.

Some of the largest exits this quarter include the €3.27 billion IPO of Apax-owned second-hand car sales website Auto Trader, the €2.9 billion flotation of CVC-backed Sunrise Communications, and the €1.05 billion sale of Infront Sports & Media by Bridgepoint to Chinese conglomerate Dalian Wanda Group.

The European buyout market, while notably lower than the exit market at €19.9 billion, is also up from the same period the previous year, which saw €14.9 billion worth of transactions, and the highest Q1 since 2008, which saw €24.7 billion worth of deals.

Entry EBITDA multiples in Q1 2015 were higher than in Q4 2014, with averages at 11.5 for deals between €10 million and €100 million and 12.5 for deals greater than €100 million. Exit EBITDA multiples for deals over €100 million were up at 14 in Q1 2015, compared to 11.4 for the hole of 2014.

The UK had a strong start to the year, continuing to lead the European private equity market, accounting for 39 percent of the overall buyout value for Q1 2015, with 52 transactions worth €7.7 billion, and 41 percent of the total exit value for this period, with 44 exits worth €12.2 billion.