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03 December 2019

Buy & Build activity in H1 2019 reaches highest level for 20 years

Silverfleet Capital, in conjunction with Mergermarket, publishes the findings of its European Buy & Build Monitor for H1 2019. The Buy & Build Monitor tracks global add-on activity undertaken by European‑headquartered companies backed by private equity.

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  • Silverfleet’s H1 2019 Buy & Build Monitor reports 3681 add-ons, up from 338 in H1 2018
  • Buy & Build activity outperforms mid-market M&A and European buyout indices
  • The Nordic region was the most active, bouncing back from a weak 2018
  • The UK & Ireland had a relatively subdued performance in an otherwise active market
  • The DACH region performed poorly relative to H1 2018

European Buy & Build activity in the first half of 2019 reached the highest level ever recorded, according to Silverfleet Capital’s European Buy & Build Monitor.

The Buy & Build Monitor, identified a provisional total1 of 368 add-ons in the first half of 2019 with a total deal value of €2.4b up 9% from H1 2018 when 338 add-ons were recorded. This is the highest level of add-on activity for the half-year since Silverfleet started tracking the data in 1998.

Eight add-ons with values greater than €65m were announced in the first half of 2019.

Silverfleet’s Buy & Build activity in H1 2019 includes German portfolio company and market leader Prefere Resins’ acquisition of the melamines and formaldehyde activities of privately held Ineos Enterprises. This add-on has significantly expanded the range of phenolic, amino and melamine resins as well as high quality derivatives of methanol-(C1)- chemistry offered by the Prefere Resins Group.

More recently, Silverfleet backed the merger of Microgen and Touchstone to create a leading technology provider to the Trust and Corporate Services market. The merger is subject to competition authority clearance. The deal will feature in the next Buy & Build Monitor.

Commenting on the findings, Gareth Whiley, Managing Partner of Silverfleet Capital, said: “Our latest European Buy & Build Monitor shows that add-on activity in Europe in the first half of 2019 reached its highest level since we started tracking the data in 1998. Interestingly the data also appears to show that the historic correlation between levels of add-on activity and M&A and PE deal-volumes generally may be breaking down, with the latter indices showing declines in H1 2019. We think that this continues to show the importance of Buy & Build as a value creation tool for private equity even in the face of greater general market uncertainty.”

1 For details on the methodology please see the full report.