European Private Equity Mid-Market Monitor: Q1 2024 & Outlook
Date
5 min read
Europe’s private equity market saw one of the busiest buy-and-build quarters on record in Q1 2024, amid a slowdown for buyout acquisitions.
DC Advisory’s European senior bankers share their reflections on the first quarter of 2024, and the outlook and opportunities for the next 12 months.
In this edition we explore:
- European and country-by-country deal trends
- Secondary solutions
- Asia and Europe cross-border activity
- Outlook & opportunities
As featured on Sky News
The European market has been slower. In Q1 2023 there were 3,969 completed transactions and in Q1 2024 there were 3,055 – a 23% year-on-year decline.[i]
Perception vs reality
If you ask most people in the private equity market, it is likely they would say; “things are looking up, we are busier”, and yet the number of new buyouts completed in Europe in Q1 2024 was the lowest reported quarterly number since Q3 2020 – the depths of the Covid crisis.
At 467 deals, the volume is 13% below Q4, and 9% below the same quarter last year.
Buyouts and bolt-ons
The same is not true for bolt-ons for existing private equity owned businesses. 55% of all deals completed by private equity were bolt-ons – some 560 deals.
This is the highest percentage on record and is part of a clear and long-term trend. In 2019 c.30% of private equity deals were bolt-ons. By 2022 it was over 40% and through 2023 it touched 50%. So, it is clear that much of the “we are busier” observations from private equity are true – but the focus has been more on bolt-ons than new buyouts.
Figure 2: Q1 private equity buyouts (%)
Source: Mergermarket (see Appendix*)
Figure 3: Q1 private equity bolt-ons (%)
Source: Mergermarket (see Appendix*)
M&A as a driver of value
In a market where the appetite for risk remains low, bolt-ons often deliver lower risk returns. The investor knows the business and the industry and has confidence in a management team and platform. Revenue and cost synergies can underwrite earnings growth and there is often a multiple arbitrage opportunity on exit – lower risk and higher returns.
With an existing investee company, private equity can evaluate opportunities in the same way that trade investors can. And as consummate deal-doers, this group of investors can deliver compelling value for vendors.
Read the full report >
Sign up to our mailing list for future releases >
Appendix
DC Advisory has prepared this material solely for informational purposes and it is not a research report. This material does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of any offer to buy, or any recommendation with respect to, any securities. For other important information, please read our Insights & Publications disclaimer >
|
Mergermarket search criteria for chart and graph data* |
|
|
Figure 2
|
Dataset for each time frame outlined, comprises private equity buyout volumes with deal values GBP 75 M and above, including those with undisclosed values, across all sectors in Europe |
|
Figure 3 |
Dataset for each time frame outlined, comprises private equity bolt-on volumes with deal values GBP 75 M and above, including those with undisclosed values, across all sectors in Europe |
Sources
[i] Mergermarket: Total deal activity in Europe - All transactions in Europe between 1-Jan-19 to 30-Apr-24 with deal values GBP 75 M and above
What to read next
Written by
Executive Chairman, Europe
United Kingdom
United Kingdom
Netherlands
Netherlands
Poland
Germany
Italy
Spain
United Kingdom
United Kingdom
Contact form
Thank you!
Your message has been received by DC Advisory so you'll hear back from us soon.
We collect your personal data if you sign up to receive news or get in touch with us. This is collected by third-party firms on our behalf. We have three separate lists:
- DealCloud - which we use as our CRM. DealCloud privacy statement is available here: https://www.intapp.com/privacy/
- SalesForce - which we use as our CRM. SalesForce privacy statement is available here: https://www.salesforce.com/uk/company/privacy/
- Spotler - which we use to send email marketing campaigns. Spotler privacy statement is available here: https://spotler.co.uk/privacy-policy/
Application form
Thank you!
Your message has been received by DC Advisory so you'll hear back from us soon.