13 May 2013
European Buy & Build activity subdued in Q1 2013
The volume of Buy & Build activity in Europe in Q1 2013 was much weaker than in previous quarters, with only 56* add-ons completed in the quarter compared with 78 add-ons in the same quarter of 2012 and an average for 2012 of 72 add-ons per quarter.
The average disclosed value of add-ons in the quarter was more stable at £51 million*, compared to the average of £52 million seen in Q4 2012 and slightly above the average for 2012 of £46 million but this is based on a small sample size as only 11 deals with disclosed values were completed in Q1 2013.
Commenting on the findings, Neil MacDougall, Managing Partner of Silverfleet said: “The appetite of PE backed European companies to complete add-on acquisitions in certain parts of Europe, most notably in France, was very weak in the first quarter of 2013. In contrast the number of add-ons of targets outside of Europe was in line with last year’s level of activity.”
“As with the Q4 2012, the largest add-on in the quarter for which a price was disclosed was in the Nordic region. This was the DKK 2 billion acquisition of ISS’s pest control operations in 12 countries, by EQT-backed Anticimex AB. This was one of ten add-ons of a target based in the Nordic region which were announced in the quarter contributing to a robust level of activity in that part of Europe.”
“However for the continent as a whole, European mid-market M&A and the number of buyouts done in Europe were both at subdued levels in Q1 2013 and the same effect can clearly be seen in Buy & Build activity. This data suggests that Europeans do not yet see an end to the continent’s sovereign debt and banking problems and the knock-on impact they are having on GDP growth.”