Total private equity deal values more than doubled in Q2, with a high number of secondary buyouts pushing this figure to EUR27.3bn – the highest total seen since the third quarter of 2007 – according to the unquote" Private Equity Barometer, which is published in association with Arle Capital Partners.
On a year-to-date basis, deal values are up by 59% on 2010 at EUR41.1bn, although activity levels are down 6% from Q1, with 253 deals completing compared to 269. Year-to-date activity levels are down by 11%.
Buyouts by value in Q2 jumped to EUR25.7bn, more than double the figure recorded in Q1, driven primarily by a comeback at the larger end of the market, although volumes were stagnant at 106 transactions.
The EUR1bn+ value bracket saw a four-fold increase in deals from two to eight, with the EUR2.4bn acquisition of Swedish security solutions company Securitas Direct the largest of these deals.
There was a surge in secondary buyouts in Q2, accounting for roughly half of all buyout deals by volume at 51 deals and exactly half of the eight EUR1bn+ deals. The Securitas acquisition was also the largest secondary transaction.
The mid-market category, covering deals worth between EUR100m-EUR1bn, also witnessed sharp increases, with volumes rising 67% to 35 and value jumping 58% to EUR11.3bn.
The smallest size range, containing deals worth less than EUR100m, saw deal numbers drop 21% to 63, though deal value did increase slightly to EUR2.8bn.
John Arney (pictured), Managing Partner of Arle Capital Partners, says: “Private equity players are keen to spend committed capital and are focusing strongly on quality and size given the uncertain outlook around the Euro. The surge in value at the top and mid end of the buyout market also points to a return of confidence in the debt markets, with some recent leverage multiples approaching 2007 levels.
“Secondaries are currently driving the market but we expect to see more primary activity towards the back end of the year and into 2012. A notable feature of the market is the increasing competition faced by private equity bidders as corporates with strong balance sheets and surplus cash seek out accretive strategic acquisition targets.“
