Europe’s private equity industry has continued to rebound following disruption caused by the pandemic, completing 741 buyouts cumulatively valued at EUR141.5 billion in 2021, according to provisional full-year data from CMBOR, the Centre for Private Equity and MBO Research.
Deal volume is broadly consistent with previous years, barring the understandable dip in 2020, whilst deal value reached its highest level since 2007, signalling Europe’s upswing as markets began to stabilise.
Private equity activity in the UK market in 2021 reached levels not seen since before the global financial crisis. At GBP45.8 billion, the cumulative value of the 235 buyouts of UK-based companies last year represented the biggest headline figure in the 35-year history of CMBOR, surpassed on an inflation-adjusted basis only by the GBP44.1 billion recorded in 2007.
In CMBOR’s first full-year data announcement since its re-establishment within Nottingham University Business School with the support of Equistone Partners Europe, ‘mega-deals’ were a major driver of the bounceback in European buyout activity. The 37 transactions valued at over EUR1 billion contributed EUR94.7 billion, or approximately two-thirds, of aggregate buyout value – an unprecedented volume, aggregate value and market share for deals of this size. Public-to-private buyouts of listed companies accounted for seven of Europe’s 20 biggest deals as large-cap sponsors sought acquisition opportunities in public markets and deployed significant capital into take-private transactions.
European exit activity has also recovered to the levels seen during the record five-year period from 2014 to 2018, when cumulative exit values exceeded EUR100 billion each year. After recording EUR73.7 billion and EUR65.1 billion in total exit value in 2019 and 2020 respectively, there were 374 exits with a cumulative value of EUR128.8 billion in 2021. Flotations have been a crucial driver of this value, with six of the biggest 10 exits of the year being listings, showing private equity firms also steering investee companies back towards public markets following a successful hold period.
In retaining its position as Europe’s largest private equity market, by both volume and value, the UK witnessed the same skew towards large-cap buyouts and take-private transactions, with 12 deals valued at over GBP1 billion and public-to-private buyouts of listed companies accounting for five of the 10 biggest deals. Germany and France ranked second and third, with 111 deals valued at EUR17.2 billion and 90 deals valued at EUR19.7 billion respectively.
