05 August 2013
Q2 2013 saw rising deal values in European Buy & Build
The volume of Buy & Build activity in Europe in Q2 2013 was broadly in line with activity in the first quarter of the year, with an initial number of 61 add-ons undertaken compared to a Q1 number which has been revised upwards to 63 from 56. However, as usual, we would expect this figure for Q2 to also be revised up as more deal information becomes available*. We therefore conclude that the level of activity in Q2 will most probably turn out to have been higher than in the first quarter.
Notably the average disclosed value of add-ons in the quarter increased significantly to £66 million, from £47 million in Q1 2013 and against an average of £49 million over the previous two years. This average value is based on the 15 deals with disclosed values which occurred during the quarter.
Commenting on the findings, Neil MacDougall, managing partner of Silverfleet Capital said: “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 albeit to a lesser degree.
In particular there were two add-ons of significant scale: the €303 million acquisition of ATC Group, a global fiduciary services business headquartered in the Benelux, by Blackstone-backed Intertrust; and the €250 million add-on of the service solutions division of Hochtief Solutions AG by Clayton, Dubilier & Rice-backed SPIE SA”
These acquisitions were financed by additional syndicated term loans of €200 million and €240 million respectively demonstrating the keen appetite of the current European debt market to support large add-ons by private equity-backed companies.”