Posted on 18 August 2015
According to the Centre for management Buy-out research, H1 2015 showed a significant increase in buy-out exits across Europe, the €81bn exit values exceeding new money invested over the same period (€37.3bn) by more than 100% - the first time this has ever happened. These exits can be broken down into those arising from secondary buy-outs, trade sales and flotations.
The total exit figure was significantly bolstered by 25 buy-out Flotations for a combined value of €31bn; these included the very large flotations of French optical retailer Grandvision, French technical services company SPIE, UK online business Autotrader and Swiss wireless carrier Sunrise.
However, the most notable feature was the rapid rise in Trade Sales which recorded €31.6bn from 90 exits, one of the best half years on record. Amongst the top 10 European exits were the Trade Sales of UK businesses United biscuits, Wood Mackenzie and Iglo Group.
Whilst Secondary buy-outs do not feature as large value buy-out exits for H1 2015, in the top 50 they amounted to 40% of transactions by volume. Secondary buy-out exits were increasingly prevalent where exit value is around €700m or less.
The Midlands deal market has broadly reflected the rising activity demonstrated by the European market. In recent months it has seen the £310m disposal of Cromwell Tools and £95m sale of HL Plastics, both to large American corporates. These transactions demonstrate the appetite and confidence of International buyers looking to invest into Europe.
At Smith Cooper, the record activity levels which yielded of 24 deals in 2014 have continued and the pipeline remains strong. Most prevalent are Trade Sales, fuelled by the continuing benign capital gains tax regime, better values over the last couple of years, and the sustained pent up demand from shareholders who deferred selling during the recession.