The majority of PE-backed buyouts in Q3 were add-ons, according to the latest private equity data from PitchBook Data. Private equity firms completed 458 deals totaling $78.4 billion in 3Q 2013. Though overall deal count is slightly down from last year and total PE capital invested is more than $4 billion greater than in 3Q 2012, according to PitchBook Data.
According to the latest private equity data from PitchBook Data, Inc., private equity firms completed 458 deals totaling $78.4 billion in 3Q 2013. Though overall deal count is slightly down from last year, total PE capital invested is more than $4 billion greater than in 3Q 2012. The median deal size has dropped from $40 million in the third quarter of 2012 to $32.5 million in the third quarter of 2013.
PitchBook’s Key Insight:
Private equity growth/expansion deal capital is down 70% from a year ago, from $10.5 billion in 3Q 2012 to $3.2 billion in 3Q 2013, despite deal count being up. This significant drop can be attributed to two influences. First, the largest deal in the third quarter of 2013 was the same size as only the fifth largest deal in third quarter of 2012 ($300 million). Mega deals in 3Q 2012, such as the $3 billion dollar PE growth/expansion investment in Zayo Group, combined with a 50% greater median deal size in 3Q 2012, help to explain the disparity in activity in 3Q 2013. Add-on financings also made up 54% of private equity buyout deals in 3Q 2013, a two-year high.
“Private equity firms are focused on growing their portfolio companies both organically and acquisitively” said John Gabbert, CEO and Founder of PitchBook. “Given their capital resources and investment time frame, acquisitive growth makes a lot of sense for PE investors. The increase in add-ons has been a decade long trend that shows no signs of changing anytime soon.”
Other insights from PitchBook:
• The third quarter was the best quarter so far in 2013, with 458 deals totaling $76 billion.
• Buyouts made up the majority of PE deal count and capital overall, totaling 325 deals and $70 billion invested.
• The top three industry sectors during the third quarter were Commercial Services (77 deals), Commercial Products (60 deals) and Software (54 deals).
• The firm with the most private equity deals in the third quarter was the Audax Group, with nine 3Q deals. They are also leading in PE deal count for the year-to-date, with 19 deals.
For further private equity deal insights from 3Q 2013, be sure to check out the infographic below.
About PitchBook Data
PitchBook Data, Inc. is a research firm providing superior data, news and analysis on the venture capital and private equity industries. PitchBook provides its clients with the highest quality information on the entire investment lifecycle through its award-winning online PitchBook Platform.
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Tessa Griffin – PitchBook Data, Inc.