Private equity-backed sales in Europe appear to be weakening, according to the Centre for Management Buy-out Research.
Provisional exit values fell to €39.9 billion in the first half of this year, down 30 percent from €56.9 billion in the second half of last year. This is the lowest H1 total since 2013, CMBOR’s latest report found. The UK had the steepest drop, with £6.0 billion (€6.8 billion; $7.9 billion) generated in H1, down from £13.6 billion in H2 2017.
“After four years in which the environment has been conducive to selling assets, helped by the availability of debt on the buyside, there has been a pronounced downturn in the exit market – particularly in the UK,” Christiian Marriott, partner and head of investor relations at Equistone Partners Europe, which sponsored the research with Investec, said in a statement.
“These changing market dynamics require sponsors to be more adaptable, as reflected in the increasing popularity of highly targeted, bilateral deal processes that allow both the buyer and the seller to bypass the hyper-competition now inherent in most auctions.”