Buyout slowdown masks regional surprises

Private equity deal volume in Q1 2017 rose by 3.6 per cent to 348 from 336, while the combined value of European private equity backed deals fell to EUR27.5 billion from EUR39.3 billion, according to the Q1 2017 Private Equity Barometer, published by unquote” in association with SL Capital Partners.

The average deal value in Q1 2017 (EUR79.1 million) was down 32 per cent on Q4 2016 (EUR117.1 million), while deal volume was the highest since Q3 2016 while deal value was the lowest since Q3 2016.
 
The value of buyouts fell 40 per cent from EUR36.3 billion in Q4 2016 to EUR21.9 billion in Q1 2017. The number of deals decreased to 152 in Q1 2017, down 25 from 177 in Q4 2016, while buyout volume was the lowest since Q1 2015 and aggregate deal value the lowest since Q1 2016.
 
There were falls across all three deal value ranges compared with Q4 2016. The large cap value range lost the most value, deal value was down EUR8.1 billion to EUR7.9 billion – Q1 2017 registered only five deals in that segment compared to nine in Q4 2016. The mid-market range values decreased by EUR5.2 billion to EUR10.4 billion following a drop in deal numbers from 53 to 42.
 
Deal volume rose in France, Italy and the UK although value fell in each. Benelux was the only region to register a rise in aggregate deal value.
 
Peter McKellar, head of SL Capital, says: “The Q1 2017 results demonstrate that both activity and value in the European private equity market continue to be volatile. Overall, in terms of value all size segments of the European buyout market fell compared to Q4 2016. Notwithstanding this lower activity, the UK, France and Italy posted a higher number of buyout transactions, potentially pointing to the depth of opportunities and available capital in these markets.” 

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