According to private equity data provider Preqin, private equity buyout firms had their strongest year in 2013 since before the global financial crisis. Preqin reported that 2013 had 2,830 private equity-backed buyouts at an aggregate value of $274 billion. This was the highest value since 2007 when $661 billion worth of deals was announced. Other findings: Thirty-eight percent of all deals in 2013 were leveraged buyouts while three-quarters of all private equity-backed buyout deals in 2013 were small-cap investments.
2,830 private equity-backed buyout deals were announced throughout 2013 with an aggregate value of $274bn, the highest value since $661bn worth of deals were announced in 2007.
Private equity buyout firms have had their strongest year of deal making since before the global financial crisis, announcing 2,830 investments valued at $274bn. Although this is the highest value of buyout investments since 2007, the number of deals taking place has actually fallen by 11% from the year before. The exit environment has also improved in 2013, with the largest number of private equity-backed exits taking place since 2006, with the aggregate value of exits at $303bn.
Other Key Facts:
· North America experienced its strongest year since 2007 in terms of total value of buyout deals, with 1,516 deals valued at $171bn, a 10% increase compared to the total value of private equity-backed buyout deals in 2012.
· The number of deals in Europe decreased by 4% from 2012 to 2013, while aggregate deal value increased by 6% over the same period, due to the average deal size increasing from $203mn in 2012 to $227mn in 2013.
· Thirty-eight percent of all deals in 2013 were leveraged buyouts, representing 43% of the aggregate value of deals globally during the year, down from 59% of the aggregate deal value in 2012. This was predominantly due to the investments in Dell Inc. and H.J. Heinz Company which meant public-to-private deals accounted for 31% of aggregate deal value in 2013.
· Three-quarters of all private equity-backed buyout deals in 2013 were small-cap investments, classed as those valued at under $250mn.
· 1,348 private equity-backed exits valued at $303bn were witnessed in 2013, which is the highest annual number of exits in the period from 2006 to present, and the second highest annual aggregate exit value in the same time period.
· There were 255 private equity-backed IPOs and follow-on share offerings valued at $80bn, the highest annual number and aggregate value of such exits in the period 2006-2013.
For more information and analysis, please see the factsheet that follows.
“2013 has seen notable growth in deal making activity for the private equity industry. Although the number of deals being made has dropped compared to 2012, the aggregate value of deals that took place is at its highest point since before the global financial crisis. With exit activity also buoyant, particularly for the IPO market, and fundraising experiencing notable gains, 2014 looks set to be a very positive year for the industry.
While there have been strong deal levels in developed economies such as Europe and North America, there has been a significant drop off since 2011 in the value of deals taking place in Asia and other emerging markets. This trend is reflected in fundraising figures, demonstrating that both investors and fund managers are becoming more risk averse.”
Ignatius Fogarty – Head of Private Equity Products, Preqin
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