Europe’s buy-and-build market remained subdued between April and June, with deal volumes failing to surpass those of the lacklustre first quarter.
Acquisitions by private equity-backed companies in Europe remained at a low level between April and June, according to research from Silverfleet Capital and Mergermarket.
Some 63 buy-and-build deals were completed, the same number as in the first quarter of 2012. Of these, 12 involved UK-based targets, compared to 13 in the first quarter.
These figures look low compared to those seen in 2011, when every quarter saw more than 80 add-on deals by European companies. Activity peaked in the second quarter of last year, with over 100 deals conducted, the highest figure since 2008.
Neil MacDougall, managing partner of Silverfleet Capital says, ‘The lower level of buy-and-build activity that we have observed since the real onset of the Eurozone sovereign debt crisis in mid-2011 continued through the second quarter of 2012, with overall activity only slightly above the trough seen in mid-2009.’
The average value of disclosed deals in the second quarter was £45 million, compared to £26 million in the previous quarter, but lower than the average of £70 million seen in the third quarter of 2011.
France was the only country to see a big jump in activity. In the second quarter, 13 French companies were acquired, compared to five in the previous three months. Ten of these acquisitions were made by other French companies.
MacDougall remarks that since the European Central Bank initiated its long-term refinancing operation, which provides banks with cheap debt, interest in conducting leveraged deals has increased, especially in France and Germany.
Though the broader outlook remains subdued, the UK, Germany and the Nordic region retain their dominance within Europe, accounting for two-thirds of M&A activity across the continent.