Private equity buyout activity made a resurgence in the first half of the year, with direct lending emerging as a crucial component in the current market topography, according to the latest data from Mergermarket and Debtwire.
The H1 2024 Buyout Highlights reports reveal that in the US, buyouts surged to $146bn from $108bn in H1 2023, led by Truist Insurance’s $12.3bn acquisition by Stone Point Capital, Clayton Dubilier & Rice, and Mubadala Investment.
Leveraged loan issuance meanwhile climbed 75% to $41bn in over the period, while high yield bond buyouts stalled in Q2, totalling $4.3bn, less than half of H1 2023’s volume.
Direct lenders meanwhile, doubled their activity over the same period, funding $20.6bn in buyout financing in the first half of the year.
Technology firms led M&A activity, with deals amounting to $64bn.
In Europe, buyouts totaled €95bn, up 168%, led by Apollo Global Management’s €10.1bn acquisition of a 49% stake in the joint venture entity related to Fab 34.
Issuance of leveraged loans recovered in Q2 2024, rising 62% from Q1 2024 to €8.13bn and totaling €13.1bn for teh first six months of the year.
High Yield bond activity for LBOs resumed in 2Q24 with €1.23bn, while half-year issuance was the lowest since H1 2017.
As in the US, the technology sector topped the table with buyouts totaling €36.5bn.
Lucinda Guthrie, Head of Mergermarket, says, “PE firms bounced back into buyouts in H1 2024. With record levels of dry powder, PEs were under pressure to deploy. They were willing to take on more complex transactions, from larger ticket sizes to multi-billion dollar listed company acquisitions.
“The significant jump in buyout activity in the US and the huge resurgence in Europe mark a turning point since rising interest rates reset the dealmaking conditions two years ago. The latest deal flow shows how buyouts are evolving in this landscape, with direct lending acting as a significant feature of the market dynamics.”
