PitchBook-2023年一季度欧洲PE细分（英）-2023-WN5.pdf

Q12023EUROPEANPE BreakdownQ12023群内每日免费分享5份+最新资料 群内每日免费分享5份+最新资料 300T网盘资源+4040万份行业报告为您的创业、职场、商业、投资、亲子、网赚、艺术、健身、心理、个人成长 全面赋能！添加微信，备注“入群”立刻免费领取 立刻免费领取 200套知识地图+最新研报收钱文案、增长黑客、产品运营、品牌企划、营销战略、办公软件、会计财务、广告设计、摄影修图、视频剪辑、直播带货、电商运营、投资理财、汽车房产、餐饮烹饪、职场经验、演讲口才、风水命理、心理思维、恋爱情趣、美妆护肤、健身瘦身、格斗搏击、漫画手绘、声乐训练、自媒体打造、效率软件工具、游戏影音扫码先加好友，以备不时之需扫码先加好友，以备不时之需行业报告/思维导图/电子书/资讯情报行业报告/思维导图/电子书/资讯情报致终身学习者社群致终身学习者社群关注公众号获取更多资料关注公众号获取更多资料2ContentsPitchBook Data,Inc.John Gabbert Founder,CEONizar Tarhuni Vice President,Institutional Research and EditorialDylan Cox,CFA Head of Private Markets ResearchInstitutional Research GroupAnalysisDataCharlie Farber Senior Data Analyst Oscar Allaway Associate Data Analyst PublishingReport designed by Julia MidkiffPublished on April 19,2023 Click here for PitchBooks report methodologies.Nicolas Moura,CFA Analyst,EMEA Private CQ1 2023 EUROPEAN PE BREAKDOWNIntroduction3Deals4Spotlight:Exploring European buyout multiples8Exits10Fundraising143Q1 2023 EUROPEAN PE BREAKDOWNINTRODUCTIONIntroductionEuropean PE dealmaking slowed in Q1 as the macroeconomic environments impact on the industry finally started showing in the data.European PE activity continued to drop sequentially,having peaked in Q2 2022,with Q1 2023 seeing 182.8 billion in deal value across a deal count of 1,932 dealsdown 8.7%and 3.8%quarter-over-quarter(QoQ),respectively,and down 6.8%and up 6.1%year-over-year(YoY),respectively.We have seen deal count stay fairly resilient while deal value dropped harder,as sponsors continued avoiding megadeals in favour of smaller bolt-on acquisitions,which represented 59.8%of deal count as opposed to 22.6%for platform buyouts.Deal value from non-European investors fell sequentially for three consecutive quarters going from a peak of 109.1 billion in Q2 2022 down to 28.6 billion in Q1 2023,a 73.8%decrease in less than a year.The drop is partly due to the entire industry suffering from higher interest rates and depressed markets,but it can also be attributed to the lower inflows into Europe-based companies from non-European investors.Another explanation relates to the denominator effect,which has forced LPs to rebalance their portfolios by selling out of private markets to reinvest in public markets.Given that around 60%of the worlds PE capital lies in the US,we expect less of it to flow into Europe.Purchase price multiples for LBOs are contracting as interest rates continue rising.For PE sponsors,higher interest rates imply higher borrowing costs,meaning less leverage and at greater expense,and thus a lower propensity to pay high multiples for a given business.For LPs,higher interest rates and higher borrowing costs impact their commitment levels to GPs and trigger asset allocation rebalancing through the denominator effect,which in turn negatively affects GPs through fund outflows and tougher fundraising conditions.The lower purchase price multiples are also forcing sponsors to strengthen their portfolio companies balance sheets,focusing on revenue and margin expansion to unlock value instead of multiple expansion.European PE exit activity has plateaued in recent quarters,falling from the highs seen in 2021 and early 2022.In Q1,we saw 70.7 billion worth of exits,which was unchanged compared with the previous quarter and down 12.0%YoY,mostly driven by corporate acquisitions as opposed to public listings and buyouts.European median buyout multiples fell from a peak of 14.5x EV/EBITDA in Q1 2022 down to 10.2x EV/EBITDA in Q1 2023 on a rolling four-quarter basisthe lowest level since the global financial crisis(GFC).The drop in multiples and sluggish exits derive from the unfavourable credit conditions caused by higher interest rates,which led sponsors to hold onto their assets for longer.European PE fundraising picked up in Q1,raising 26.4 billion,and is on pace for a higher fundraising year than 2022.This is a signal of confidence to private markets in our opinion,as we have seen some very large megafunds emerge in Europe already in Q4 2022 with Nordic Capitals 9.0 billion fund.In Q1,we continued to see large funds accounting for the bulk of fundraises,including one megafundPermiras 16.7 billion eighth flagship fund.With a focus on fundamentals and established track records,the majority of funds raised come from traditional buyout funds.In periods of uncertainty,we see the familiarity bias prevail.4Q1 2023 EUROPEAN PE BREAKDOWNDEALSDeals 05001,0001,5002,0002,500050100150200250300Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1201820192020202120222023*Deal value(B)Estimated deal value(B)Deal countEstimated deal countPE deal activity by quarterSource:PitchBook Geography:Europe *As of March 31,20230%10%20%30%40%50%60%70%80%90%100%20132014201520162017201820192020202120222023*1B+500M-1B100M-500M25M-100M 25MShare of PE deal value by size bucket Source:PitchBook Geography:Europe *As of March 31,2023Fewer and smaller dealsEuropean PE dealmaking slowed in Q1 as the macroeconomic environments impact on the industry finally started showing in the data.European PE activity continued to drop sequentially,having peaked in Q2 2022,with Q1 2023 seeing 182.8 billion in deal value across a deal count of 1,932 deals,down 8.7%and 3.8%QoQ,respectively,and down 6.8%and up 6.1%YoY,respectively.We have seen deal count stay fairly resilient while deal value dropped harder as sponsors continued avoiding megadeals in favour of smaller bolt-on acquisitions.While Q1 2022 totalled 17 megadeals last year,we saw only three megadeals close in Q1 2023,the largest being the asset sale of Italian refinery ISAB by Lukoil to a consortium led by Trafigura for 1.5 billion.Other deals include the buyout of French automotive data firm A2Mac1 by Providence for 1.4 billion and the rescue acquisition of French nursing home group Orpea by the countrys public lender Caisse des Dpts Group for 1.1 billion.Over two-thirds of overall deal value in Q1 2023 came from deals between 100 million and 500 million,compared with 10-year average of 47.9%of overall deal value for that deal size,emphasizing that we are seeing smaller PE deals in the current climate.Adding to this point,bolt-on deals continued thriving,offering growth to companies through M&A.In Q1,bolt-ons accounted for 59.8%of overall deal count as opposed to platform buyouts at 23.1%,and PE growth/expansion investments at 17.2%.This was the highest percentage of overall deal count to date,eclipsing the 10-year average of 44.7%.The same point can be made looking at deal value,which saw bolt-ons represent 54.2%of overall deal value in Q1 compared with the 10-year average of 35.6%.In one example,Q1 saw the Irish food manufacturer Kerry Group dispose of its sweet ingredients portfolio to US PE giant 5Q1 2023 EUROPEAN PE BREAKDOWNDEALSAdvent for 500 million.The acquisition was made through one of Advents portfolio companies,IRCA,a producer of Italian dessert ingredients,which it bought in 2022 for 1 billion.This is a classic buy-and-build PE strategy with Advent adding a smaller complementary business to its initial centerpiece.Foreign investors retreatEuropean PE AUM has more than doubled in the past decade,going from around 400 billion to a record 874 billion in AUM in 2022.A large contributing factor to this has been the increased investments from non-European investorsmostly coming from North Americareaping the benefits of globalisation,cheap interest rates,and a strong US dollar.However,we have seen deal value from non-European investors fall sequentially for three consecutive quarters from a peak of 109.1 billion in Q2 2022 down to 28.6 billion in Q1 2023a 73.8%decrease in less than a year and the lowest quarter since Q1 2016.1 Of course,the drop is partly due to the entire industry suffering from higher interest rates and depressed markets,but it can also be attributed to the lower inflows into Europe-based companies from non-European investors.February 24,2023 marked the one-year anniversary of the start to the devastating Russia-Ukraine war.The conflict hit Europe unexpectedly in February 2022,and most experts did not foresee it lasting over a year.This has resulted in an energy crisis across the continent with all major commodities rising in price,a loss in business confidence,lower growth,higher inflation,and lower purchasing power due to a fall in currencies versus the US dollar.Add the politics to this,from the UK navigating a post-Brexit environment to Italy electing a far-right party,and Europe has clearly suffered economically.This could help explain why non-European investors are becoming more hesitant and cautious to deploy capital in Europe.Another possible explanation relates to the denominator effect.By definition,it occurs when the value of public market assets drops in ones portfolio relative to the value of the portfolios private market allocation,and as such the allocation to private markets grows beyond its target asset allocation range.The consequence of the denominator effect is that LPs are forced to rebalance their portfolios by selling out of private markets to reinvest in public markets.Given that 60%of the worlds PE capital lies in the US,it is safe to assume that when US LPs rebalance their private market portfolios,they are more likely to keep their US 1:Note:Excluding Q2 2022,which was entirely attributable to pandemic lockdowns.PE growth/expansionAdd-onBuyout/LBOPlatform creation0%10%20%30%40%50%60%70%80%90%100%20132014201520162017201820192020202120222023*Share of PE deal count by typeSource:PitchBook Geography:Europe *As of March 31,202302004006008001,00020122013201420152016201720182019202020212022*Dry powderRemaining valuePE AUM(B)Source:PitchBook Geography:Europe *As of December 31,2022PE funds rather than their European ones,nurturing their established relationships with domestic GPs based close to them and benefiting from dollar-based funds,thus reducing their risk appetite for investment abroad.For more coverage of the denominator effect,see our 2022 Allocator Solutions:Taking the“Demons”Out of the“Denominator Effect.”6Q1 2023 EUROPEAN PE BREAKDOWNDEALS0100200300400500600020406080100120Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q120182019202020212022 2023*Deal value(B)Deal countPE deal activity with non-European investor participation by quarterSource:PitchBook Geography:Europe *As of March 31,2023Higher interest rates and lower buyout multiplesPurchase price multiples for LBOs are contracting as interest rates continue rising.Despite some global seismic moves of nonconfidence in the banking sector in March 2023 with the collapse of Silicon Valley Bank(SVB)and the takeover of Credit Suisse,major central banks around the world stayed on course to tackle elevated levels of inflation by increasing interest rates.The European Central Bank hiked rates twice by 50 basis points in Q1,taking the benchmark interest rate to 3%.The Federal Reserve and the Bank of England followed,albeit increasing by only 25 basis points the second time following the unprecedented events in the banking sector.The UK base rate currently stands at 4.25%as of the end of Q1.For PE sponsors,higher interest rates imply higher borrowing and refinancing costs,meaning less leverage at a greater expense,thus a lower propensity to pay high multiples for a given business.For LPs,higher interest rates and higher borrowing costs impact their commitment levels to GPs and trigger asset allocation rebalancing through the denominator effect,which in turn negatively affects GPs through fund outflows and tougher fundraising conditions.Ultimately,buyout multiples contract when rates increase.This inverse correlation can be illustrated with the above graph that uses the Euro 10-year bond yield as a proxy for interest rates.The lower purchase price multiples are also forcing sponsors to strengthen their portfolio companies balance sheets,focusing on revenue and margin expansion to unlock value instead of riding the wave of expanding multiples in a world of abundant capital and low interest rates.As explained in our Q2 2023 PitchBook Analyst Note:Exploring European Buyout Multiples,we feel we are at an inflection point in the PE industry.0 x2x4x6x8x10 x12x14x16x-1%0%1%2%3%4%20122013201420152016201720182019202020212022*Euro 10-year bond yieldEuro rolling four-quarter EV/EBITDAQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4EU 10-year government bond yields versus buyout EV/EBITDASources:European Central Bank,PitchBook Geography:Europe *As of December 31,2022Lower valuations and more take-privatesLower buyout multiples make take-privates look more attractive.2022 saw a correction in valuations in public markets,and as such has allowed PE sponsors to purchase companies at favourable multiples using some of the record dry powder they have been amassing during the 12-year-long bull market characterised by low interest rates,which ended in 2021.One such example was the take-private of UK-based finance adviser K3 Capital Group by Sun Capital 7Q1 2023 EUROPEAN PE BREAKDOWNDEALSPartners for 307.4 million.Having said this,we have seen considerably more take-privates in the US in Q1 compared with Europe,although we expect take-privates to be a major theme in European PE in 2023 as outlined in our 2023 European Private Capital Outlook.PE sponsors are by nature opportunistic,and a depressed public market can be a competitive advantage for the industry.Moreover,the past decade has shown us that PE is willing to go into any and every sector and geography in the market to unlock value.In fact,the only thing that lies between PE and take-privates can be regulators.This was perfectly illustrated in the recent collapses of SVB in the US and Credit Suisse in Switzerland.Both banks were ultimately looking for an acquirer of last resort to avoid a meltdown in the wider financial system.On the one hand,SVB would have shaken down half the US VC industry,and on the other hand,Credit Suisses bankruptcy would have put the European banking sectors solvency into jeopardy.In both cases,the press reported interest from the PE industry,but ultimately SVB was bought by First Citizens Bank in the US,2 while Credit Suisse was taken over by its archrival UBS with the Swiss regulator strong arming UBS in a bid to ensure the banks Swiss identity.More renewablesThe European energy crisis caused by heavy reliance on Russian oil and gas has reminded European politicians and citizens alike of the importance in investing in the energy transition towards renewables.Five out of the top 20 deals in Q1 2023 were related to cleantech.Powerfield,a Dutch CompanyInvestor(s)Deal date(2023)Deal value(M)Post-money valuation(M)Deal typeHQ locationPowerfieldEIG Global Energy PartnersFebruary 1500.0N/APE growth/expansionNetherlandsIPCEOS Investment Management GroupMarch 6400.0400.0Buyout/LBOItalyAmarencoArjun Infrastructure PartnersMarch 14300.01,000.0PE growth/expansionIrelandEV ChargersDenham Capital ManagementFebruary 28186.1N/APE g