The highly anticipated €16bn ($17.36bn) acquisition of Sanofi’s consumer health unit by buyout firm Clayton, Dubilier & Rice (CD&R) could signal a surge in large private equity deals across Europe, according to a report by Bloomberg citing comments from investors and analysts.
They point to several factors driving this trend, including record levels of uninvested capital, more affordable financing due to falling interest rates, and pressure from investors seeking returns through asset sales.
As momentum builds, a consortium of investors recently announced the acquisition of Britain’s Nord Anglia Education in a deal valued at $14.5bn.
The report quotes David Gross, Co-Managing Partner at Bain Capital, as saying: “We’re already seeing large leveraged buyouts in Europe, and more are on the way. Private equity is scaling up, with bigger pools of capital ready for major transactions.”
Henry Frankievich, Managing Director at Insight Partners, meanwhile, highlighted the technology sector as a key area for larger private equity deals. “The main driver behind this rebound is growth,” he explained. “While private equity traditionally focused on cutting costs to optimise margins, the current emphasis is on businesses with sustainable growth.”
The report cites data from Dealogic as revealing that private equity-backed deal volumes in Europe, the Middle East, and Africa (EMEA) have risen 41% year-to-date compared to the same period last year, while the number of deals worth over $5bn in the region has more than doubled over the past 12 months.
Globally, buyout deals are on track to reach $521bn by the end of the year, an 18% increase from 2023, driven primarily by larger deals rather than an increase in the number of transactions, according to analysts at Bain & Co.
Despite the resurgence in deal-making, private equity and venture capital funds globally are sitting on a record $2.62tn in uncommitted capital, or “dry powder,” as of 10 July, according to data from S&P Global Market Intelligence and Preqin.
Funds added $49.44bn to their reserves in the six months since December 2023, marking a 1.7x increase over the previous 12-month period. However, there’s growing concern over the age of these funds. “Over 25% of dry powder is now over four years old, and that’s not good for anyone,” said Douglas Hallstrom, Director at Advent International.
