April 14, 2021  •  3 min read

DC Advisory's European Mid-Market Private Equity Round-Up: Q1 2021

Related Subjects

January - March 2021

April 2021

DC Advisory presents our latest European update for mid-market activity for the Q1 2021 period.

European highlights

  • Following the resurgence of European private equity backed M&A at the end of 2020, strong deal activity across the continent has shown little sign of a slowdown in Q1 2021, with transaction volumes 68%[1] higher than that of Q1 of last year
  • Unsurprisingly, fund managers have continued to move towards acquiring tech-enabled assets that have proven resilient throughout the pandemic with buyouts across the TMT and Business & Tech-Enabled Services spaces accounting for 54%[2] of the region’s total deal activity in Q1 2020
  • Furthermore, we’re increasingly seeing an uptick in PE-backed bolt-on M&A activity[3] across Europe. As sponsors have been deterred by the highly competitive pricing and risk of acquiring new platform deals, funds are instead placing greater emphasis on backing existing platform companies by acquiring smaller competitors via bolt-on M&A. In these instances, sponsors are able to capitalise on the more favourable pricing of smaller - and sometimes struggling competitors - whilst also continuing to back their winning assets through acquisitions that will position portfolio businesses well for the post-Covid era
  • Fundraising activity has once again exhibited strength so far this year, with European levels of dry powder culminating at a record $244bn[4] at the end of Q1 2021 - an impressive result given the challenges imposed on capital raising throughout Covid-19 restrictions
  • Despite 2020 accounting for another record fundraising round, the number of funds closed was at its lowest level in a decade[5]. In light of the pandemic, LPs appear to be choosing to commit capital to fewer funds with stronger track records - with which they have built relationships and are most familiar. Should this divergence persist in 2021, it’s possible that less established funds at each level of the European mid-market will struggle to compete in auctions this year
  • Looking forward to Q2 2021, we expect to see an uptick in pitch activity, followed by a potentially quieter Q3 as funds begin to prep businesses for sale in Q4
  • Additionally, as Europe is expected to gradually emerge from lockdown, we anticipate an upturn in economic activity, substantial dry powder, easing of travel restrictions, and pent up sponsor demand for deals – thus creating a healthy environment for European deal-making

European activity snapshot

European financial sponsor dry powder to be invested ($bn)

Buyout volumes 2015-2021 YTD split by sector (%)

Buyout volumes Q1 2021 split by sector (%)

Buyout volumes in 2015-2021 YTD, split by region (%)

Buyout volumes in Q1 2021, split by region (%)

2015 – 2021 YTD deals by sector (# of transactions)

2015 – 2021 YTD total deals by geography and quarter


Regional commentary 




[1] Q1 2021 European mid-market deal report, Mergermarket, 04 March 2021 (available on request)

[2] Q1 2021 European mid-market deal report, Mergermarket, 04 March 2021 (available on request)

[3] Annual PE Breakdown, Pitchbook, 2020

[4] European Dry Powder, Preqin, 04 March 2021

[5] Annual PE Breakdown, Pitchbook, 2020

[6] All European graphs sourced from: Q1 2021 European mid-market deal report, Mergermarket, 04 March 2021. MergerMarket Search Criteria: Target location: Western Europe, Deal size: £50m - £500m, Transaction type: Buyout, Date: 01/01/2021 – 31/03/2021


Key Contacts

David Benin
Stefan Jaecker
Tod Kersten
Andrew Strudwick
United Kingdom
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