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European PE-backed deals down 10% in Q1

The number of European private equity-backed deals declined by 10 per cent in the first quarter of 2015, from the 372 transactions seen in the previous three months to 334 transactions.

That’s according to preliminary figures in the Q1 2015 unquote” European Private Equity Barometer, published by unquote” in association with SL Capital Partners, which also reveals that combined deal value dropped by 25 per cent.

At EUR59m, the average deal value in the first quarter was 16 per cent lower than that of the previous quarter.

On an annualised basis, the 12 months to Q1 2015 saw a movement towards larger deals; total deal value increased by 2 per cent, while total volume slipped by 6 per cent (as compared to the 12 months to Q1 2014.

In terms of European buyouts deals declined to 116 in the first quarter – a decrease of 23 from the 139 deals completed in the fourth quarter of 2014 – and registered the lowest total seen over the last eight quarters

Aggregated value also decreased markedly – dropping by 28 per cent from the previous quarter’s total of EUR23.3 billion, to EUR16.9 billion.

In Q1 2015, the small-cap segment was responsible for the largest part of the overall 23-deal decline, with the number of sub-EUR100m buyouts falling from 91 to 77.

DACH region and the core Nordic markets were the only two areas to register an increase in total deal volume, accounting for 18 per cent and 15 per cent, respectively, of all European private equity-backed buyouts in the first quarter.

In regional terms, the UK recorded the steepest decline in deal numbers – down 39 per cent, from 51 to 31 deals. Total deal value dropped by 51 per cent, from EUR9.8 billion to EUR4.8 billion.

Peter McKellar, Senior Managing Partner of SL Capital Partners, says: “The European private equity market started 2015 with a typically slow first quarter in both the volume and value of transactions – now almost a predictable event post an active Q4. The slowdown in the UK buyout market in this period was especially evident and one factor may be uncertainty created around the UK election.  More encouraging was the performance of the key German and Nordic buyout markets. Our view is that the transaction flow across the private equity market started to accelerate in March and we expect Q2 2015 to deliver strong growth given the positive economic background in key European markets.”

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