Nottingham University Business School

 

UK private equity market leads the way in Europe

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Europe’s private equity industry has continued to rebound following disruption caused by the pandemic, completing 741 buyouts cumulatively valued at €141.5bn in 2021, according to provisional full-year data from CMBOR, the Centre for Private Equity and MBO Research.

Deal volume is broadly consistent with previous years, barring the understandable dip in 2020, while deal value reached its highest level since 2007, signalling Europe’s upswing as markets began to stabilise.

In CMBOR’s first full-year data announcement since its re-establishment within Nottingham University Business School with the support of Equistone Partners Europe, ‘mega-deals’ were a major driver of the bounceback in European buyout activity. The 37 transactions valued at over €1bn contributed €94.7bn, or approximately two-thirds, of aggregate buyout value – an unprecedented volume, aggregate value and market share for deals of this size. Public-to-private buyouts of listed companies accounted for seven of Europe’s 20 biggest deals as large-cap sponsors sought acquisition opportunities in public markets and deployed significant capital into take-private transactions.

European exit activity has also recovered to the levels seen during the record five-year period from 2014 to 2018, when cumulative exit values exceeded €100bn each year. After recording €73.7bn and €65.1bn in total exit value in 2019 and 2020 respectively, there were 374 exits with a cumulative value of €128.8bn in 2021. Flotations have been a crucial driver of this value, with six of the biggest 10 exits of the year being listings, showing private equity firms also steering investee companies back towards public markets following a successful hold period.

UK remains Europe's biggest market

In retaining its position as Europe’s largest private equity market, by both volume and value, the UK witnessed the same skew towards large-cap buyouts and take-private transactions, with 12 deals valued at over GBP1 billion and public-to-private buyouts of listed companies accounting for five of the 10 biggest deals. Germany and France ranked second and third, with 111 deals valued at EUR17.2 billion and 90 deals valued at EUR19.7 billion respectively.

“We’ve seen an extremely buoyant European buyout market in 2021, indicating that the industry has mounted a near full recovery from the impact of Covid,” said Dr Kevin Amess, Associate Professor in Industrial Economics at Nottingham University Business School and Director of CMBOR. “What is interesting is how part of that recovery has involved private equity taking an ever-greater role in funding high-growth companies in those sectors such as technology that will be the fundamental building blocks of the European economy post-pandemic.”

Methodology

The data compiled by CMBOR summarises trends in buyouts across Europe (Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Czech Republic, Hungary, Poland, Romania and Turkey and the UK). The data in this announcement is for deals completed by 14 December 2021.

CMBOR defines buyouts as over 50% of shares changing ownership with management or private equity, or both having a controlling stake upon deal completion. Equity funding must primarily be from private equity funds and the bought-out company must have its own financing structure, e.g., MBO/MBI.

Full details are in the January 6 2022 press release from Equistone.

 

Posted on Thursday 20th January 2022

 

 

 

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