Silverfleet Capital, in conjunction with mergermarket, has published the findings of its European Buy & Build Monitor for H1 2015. The Buy & Build Monitor tracks global add-on activity undertaken by European headquartered companies backed by private equity.
A total of 143 add-ons were reported in H1 2015 compared to 169 in H2 2014, which has now been upwardly revised to 202 as further data for smaller Buy & Build transactions usually emerges after the publication date. Based on experience, the number of deals in H1 2015 is therefore very likely to also be revised upwards in the next report. However, the comparable number for the first half of 2014 was 167 and it is unlikely that any subsequent revisions will significantly transform the picture that the period was noticeably less active than H2 2014 and probably only on a par with H1 2014.
The average disclosed value of add-ons in H1 2015 was GBP36 million (EUR51 million), based on the 30 deals with disclosed values reported in that period. This is however below the upwardly revised average of GBP42 million (EUR59 million) for the 39 deals with disclosed values announced in H2 2014 and is well below the GBP83 million (EUR117 million) average for the 27 deals in H1 2014 for which valuations are available.
Despite overall Buy & Build activity in the Nordic region being well down several of the noteworthy add-ons during H1 2015 occurred in that region. These included the DKK1.7 billion (EUR230 million) acquisition of Nordea Merchant Acquiring by Advent International and Bain Capital-backed Nets Holdings A/S. Another active acquirer in Scandinavia was Cinven’s Visma AS which acquired the Nordic activities of e-conomic international a/s for an estimated DKK 1.5 billion (EUR200 million) as well as three other businesses in the region for undisclosed sums.

Most of the other noteworthy add-ons in the period occurred in the UK. These included OMERS Private Equity-backed Lifeways Group acquiring the learning disability division of Care UK for an estimated GBP66 million (EUR93 million). Three of the other larger UK transactions all shared a Competition and Markets Authority (CMA) theme. Funeral Services Partnership backed by August Equity Partners bought the 47 locations of Laurel Funerals not acquired by Dignity plc. CCMP Capital-backed Pure Gym Limited announced a deal to buy LA Fitness which the CMA approved in August, unlike their earlier bid for The Gym Group. The CMA are currently scrutinising the Electra Private Equity-backed Original Bowling Company’s bid to buy Bowlplex Limited before moving on to the holiday park industry.
Neil MacDougall (pictured), Managing Partner of Silverfleet Capital, says: “Getting add-on deals done has clearly proved tougher for PE backed companies over the last half year. Based on the experiences of our own portfolio companies the competition from rival trade buyers has been fierce, sellers price expectations have continued to rise in many sectors and due diligence can identify unacceptable risks. On top of those issues, at a certain level of sector consolidation, the regulatory authorities become involved as some of the larger deals announced in the UK demonstrate.”
