Following ‘subdued’ levels of activity in the buy and build market in the first half of 2012, the following three months fell further away.
Statistics from Silverfleet Capital and mergermarket reveal that the third quarter of 2012 saw 50 add-ons completed. The figure represents a fall of 35 from the 85 recorded over the same period in 2011.
The first half of 2012 accounted for 142 add-ons, representing a drop-off from 2011, and an even sharper fall during the third quarter of 2012.
Average disclosed deal value of add-ons during Q3 of 2012 was £42 million, in improvement from the £23 million average seen earlier in the year, but down on the £70 million from Q1 2011.
The UK accounted for ten deals over the survey period, down from the 15 and 14 recorded during the first and second quarters of the year (see table below).
Neil MacDougall, managing partner at Silverfleet Capital, comments, ‘Any hopes we had of seeing an improvement in European buy and build activity levels in the second half of 2012 have taken a big knock from this data, which once again also reflects the weakness of the European buy-out market.’
MacDougall adds that even allowing for the fact that the number of add-ons for the most recent quarter is normally revised upwards as more buy and build deals subsequently emerge, it looks as though it has been a ‘very weak quarter’ with lower activity levels in most regions of Europe and none in Spain and Portugal.
| Location of target company | Q1 2012 | Q2 2012 | Q3 2012 |
|---|---|---|---|
| UK and Ireland | 15 | 14 | 10 |
| Germany, Switzerland and Austria | 12 | 10 | 9 |
| France | 5 | 13 | 8 |
| Nordic Region | 9 | 10 | 6 |
| Benelux | 6 | 5 | 5 |
| Spain and Portugal | 5 | 4 | 0 |
| Italy | 1 | 4 | 3 |
| Central and Eastern Europe | 6 | 1 | 1 |
| South Eastern Europe | 1 | 1 | 1 |
| Total Europe | 60 | 62 | 43 |
| North America | 8 | 4 | 5 |
| Asia-Pacific | 3 | 1 | 2 |
| Latin America | 2 | 1 | 0 |
| Africa | 0 | 1 | 0 |
| Total Rest of World | 13 | 7 | 7 |
| Total Overall | 73 | 69 | 50 |
Silverfleet’s Buy & Build Monitor has listed the €212 million (£172 million) acquisition of German company CinemaxX by Doughty Hanson-backed Vue Entertainment as the largest add-on during the quarter.
Two other large deals included ISS’s purchase of Shanghai B&A Property Management, which the study says demonstrates that one of Europe’s biggest buy-outs is looking to China for future growth, and Tarkett’s buy of US-based Tandus Flooring, which shows that there is interest in American buy-outs. Neither acquisition has a disclosed value.
