03 November 2020
Buy & Build activity in first half of 2020 shows resilience in the face of Covid-19
Silverfleet Capital, in conjunction with Mergermarket, publishes the findings of its European Buy & Build Monitor for H1 2020. The Buy & Build Monitor tracks global add-on activity undertaken by European‑headquartered companies backed by private equity.
- Silverfleet’s European Buy & Build Monitor for H1 2020 reports 2531 add-ons, down from 387 in H1 2019
- Seven add-ons exceeded €65m
- TMT sector most resilient during the pandemic, outpacing other sectors
- The Nordic region was the most active with 51 add-on deals announced, with UK & Ireland in second place with 38 add-ons.
- The DACH, Benelux and Iberia regions showed relative resilience in number of add-ons compared to H1 2019
Private equity backed businesses completed a substantial number of add-ons in H1 2020, according to Silverfleet Capital’s European Buy & Build Monitor, highlighting the resilience of buy & build as a value creation strategy.
The European Buy & Build Monitor identified a provisional total1 of 253 add-ons in the first half of 2020, with the first quarter seeing 156 reported add-ons, and the second quarter seeing 81.
Despite the dip in economic activity, there were still seven add-ons with values greater than €65m announced in the first half of 2020. Most of these larger deals were in the TMT and healthcare sectors, the latter of which outperformed all other sectors, with 26 add-ons during the second quarter of the year.
Although Silverfleet did not undertake any buy & build activity in H1 2020, it recently saw portfolio company CARE Fertility complete its third add-on under its ownership, with the acquisition of Nuffield Health’s Woking Assisted Conception Service (ACS).
This add-on will enable CARE Fertility to expand its reach in the Home Counties region and follows CARE Fertility’s acquisition of IVI Midland in Tamworth and the Countess of Chester Hospital's fertility clinic, both in 2019. The deal was announced and completed in August 2020 and will feature in the next Buy & Build Monitor.
Commenting on the findings, Gareth Whiley, Managing Partner of Silverfleet Capital, said: “The significant level of buy & build activity during the first half of this year adds further proof, if any was needed, of the resilience of this enduring value creation tool in the face of government-imposed lockdowns across most of Europe. That the TMT sector has led the way over this period should be of little surprise given the growing reliance on digitally-led business models to deliver operational stability and performance. We expect to see add-ons play a central role over the rest of the year as continued market volatility creates attractive acquisition opportunities for growth-oriented companies.”
1 For details on the methodology please see the full report.