Deal values boost buy and build activity

European buy and build activity showed signs of growth in the first quarter of 2011, according to new research.

The average deal value of add-ons almost trebled compared to the same period in 2010, with a percentage increase of 292 per cent, says the study by European private equity house Silverfleet Capital in conjunction with mergermarket.

The announced values of build deals saw an across the board increase in the first quarter of this year to an average of £120 million for 15 transactions, compared to an average of £41 million for 18 transactions in the same period last year.

Neil MacDougall, managing partner of Silverfleet Capital, says, ‘The nascent recovery in deal value shows that buoyance is returning to the buy and build market.

‘After a two year hiatus, portfolio companies finally feel confident enough to take acquisition risk and dig deep in their pockets to fund bigger deals.’

Despite the rise in average deal values of announced transactions, the number of bolt-on or build transactions completed in the first quarter of 2011 was broadly in line with the same quarter in 2010, with 76 completed deals compared with 70, according to a statement.

Some 30 to 45 per cent of add-on or build transactions have a disclosed price.

The data was compiled by analysing how the average of these prices over the last ten years has moved over time.

Silverfleet Capital invests in established businesses with an enterprise value of between €75 million and €500 million. It currently has over €1 billion in funds under management.

Todd Cardy

Todd Cardy

Todd was Editor of between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital.

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