Value of private equity buy and build activity jumps

Buy and build deal activity value has climbed substantially in Europe, despite volumes remaining largely the same.

The amount of buy and build deals closed in Europe has tracked at the same rate recorded in the first quarter of the year, new findings reveal.

Despite a preliminary finding of 61 add-on acquisitions being noted during the second quarter of the year (compared with 63 over the same period in 2012), the average value of deals has climbed above the £65 million mark.

Whereas findings form Silverfleet Capital and mergermarket in the second quarter of 2012 showed 63 deals worth an average of £47 million, new findings reveal that the 61 deals noted so far were worth £66 million each. The average value is based on the 15 deals with disclosed values which occurred during the quarter.

Within Europe, the two significant add-ons recorded were the €303 million acquisition of ATC Group and €250 million add-on of Hochtief Solutions.

Neil MacDougall, managing partner of Silverfleet Capital, comments, ‘During the second quarter of 2013 there was a very noticeable increase in transaction size, with the average deal size at £66 million being the highest seen in the last seven quarters.

‘At the same time, the indications are that the number of add-ons will also have rebounded through to a lesser degree.’

With historical data normally showing that the volume of add-on deals is correlated with the volume of private equity-funded buy-outs in Europe, Silverfleet Capital predicts that the final number of add-ons completed in the second quarter will grow.

On a geographic breakdown, the study finds that the Nordic region was the area with strongest growth – while France posted an improvement from a low number of Q1 buy and build deals.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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Private Equity