European PE managers complete more than €140bn in buyouts in 2021

The European private equity industry had a robust rebound last year following the disruption of 2020, with the completion of 741 buyouts valued at €141.5 billion ($160 billion), according to data from CMBOR.

London-based CMBOR, the Centre for Private Equity and MBO Research within Nottingham University Business School, found that deal volume was consistent in 2021 with that of previous years. The key difference is that the value of the deals was the highest level since 2007.

The valuation figures signal that Europe’s upswing as markets begin to stabilize, officials said.

“We’ve seen an extremely buoyant European buyout market in 2021, indicating that the industry has mounted a near full recovery from the impact of COVID,” said Dr. Kevin Amess, associate professor in Industrial Economics at Nottingham University Business School and fellow of CMBOR. “What is interesting is how part of that recovery has involved private equity taking an ever-greater role in funding high-growth companies in those sectors such as technology that will be the fundamental building blocks of the European economy post-pandemic.”

Flotations remain an integral driver of value with realizations totaling €128.8 billion. Six of the biggest 10 exits of the year were listings, which observers say shows that private equity firms are also steering investee companies back into the public markets after a successful hold period.

CMBOR enjoys the support of Equistone Partners Europe.

“Overall private equity was a net buyer across Europe last year, but that was skewed by a handful of landmark large-cap buyouts,” said Christiian Marriott, Head of Investor Relations at Equistone. “The mid-market remains the backbone of the industry and here private equity firms have been primarily focused on realizing value for their investors. I’m sure we’re not the only GP in this segment that has returned more capital to LPs than we’ve invested in 2021.”

The 37 transactions valued at over €1bn contributed €94.7bn, or approximately two-thirds, of aggregate buyout value — represent an unprecedented volume, aggregate value and market share for deals of this size. Public-to-private buyouts of listed companies accounted for seven of Europe’s 20 biggest deals as large-cap sponsors sought acquisition opportunities in public markets and deployed significant capital into take-private transactions.

The U.K. though is the most active market, according to CMBOR, with 235 buyouts, including 12 £1 billion-plus mega deals of a cumulative value of £45.8 billion. The private equity market in the U.K. soared to levels not seen since just before the great financial crisis.

Meanwhile, the most active sector is not a surprise as TMT saw 188 deals valued at over €20 billion. Leading the way were the year’s biggest transactions — Clayton, Dubilier & Rice’s €8.3 billion purchase of Morrisons and TDR Capital’s €7.8 billion carve-out of ASDA.