European PE 2017 Breakdown 2017 Q2

In many ways, European PE activity mirrors the PE landscape in the United States. Deal and exit volumes are on a downward trend and looking at 20% or greater year-over-year decreases if the current pace continues. Despite the slowdown in the rate of investing, fundraising continues to boom, with European PE on pace to surpass the amount of capital raised in 2007—the highest amount of capital raised in our dataset. It will be interesting to see how the rest of the year plays out now that significant political uncertainty appears to be in the rear-view mirror for the time being.
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<p>European PE 
Breakdown
2017
2Q
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Credits & Contact
PitchBook Data, Inc.
JOHN GABBERT Founder, CEO
ADLEY BOWDEN Vice President, 
Market Development & Analysis 
Content 
NICO CORDEIRO Analyst
DYLAN E. COX Analyst
KORY HOANG Data Analyst 
JENNIFER SAM Senior Graphic Designer 
 
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Introduction
4
Overview
5-6
US-based Investor Activity
7
Deals by Sector & Size
8
Exits
9
Fundraising
10
League Tables
11
Methodology
12
Contents
COPYRIGHT  2017 by PitchBook Data, Inc. 
All rights reserved. No part of this publication 
may be reproduced in any form or by any 
meansgraphic, electronic, or mechanical, 
including photocopying, recording, taping, and 
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and is not to be relied upon as such or used in 
substitution for the exercise of independent 
judgment.
3 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
The PitchBook Platform
The data in this report comes from the PitchBook Platformour data 
software for VC, PE and M&A. Contact sales@pitchbook.com to 
request a free trial.
The future of European PE 
looks promising
Introduction
NICO CORDEIRO
Analyst
Key takeaways
 Deal volume is down, but deal value is off to a strong start with an estimated 201.8 billion of capital 
invested over 1,209 deals in 1H 2017. As the political uncertainty in Europe subsides, we expect this 
strong deal flow to continue throughout the rest of the year, as PE firms put 195.1 billion in dry powder 
to work.
 Exits via corporate acquisitions continue their downward trend, on pace for a 33% year-over-year 
decrease in both value and volume. Weaker corporate activity has reduced exit opportunities, but on 
the flip-side has eased pricing pressures, which resulted in median EV/EBITDA multiples dropping from 
9.2x in 2016 to 8.3x through the first half of this year.
 So far, the fear of negative economic consequences resulting from Brexit has done little to deter PE 
investors. Through the first half of the year, 36% of all capital invested in Europe by PE shops was 
placed in UK-based companies with 60.3 billion invested over 410 deals. 
 European PE firms raised 41.6 billion in commitments over 54 funds through the first half of the year. 
At the current pace, the European PE industry will raise the most amount of capital in our dataset since 
2007.
In many ways, European PE activity mirrors the PE landscape in the United States. Deal and exit volumes 
are on a downward trend and looking at 20% or greater year-over-year decreases if the current pace 
continues. Despite the slowdown in the rate of investing, fundraising continues to boom, with European 
PE on pace to surpass the amount of capital raised in 2007the highest amount of capital raised in 
our dataset. It will be interesting to see how the rest of the year plays out now that significant political 
uncertainty appears to be in the rear-view mirror for the time being.
Beginning this quarter, we've included estimates on top of the usual deal flow data that our readers are 
accustomed to. Due to the nature of private market data, information often does not become available until 
well after a transaction takes place, so shifts tend to occur over time. With these new estimates, we aim 
to provide an even more accurate picture of the private markets. Please see the methodology page of this 
report for more details.
We hope this report is useful in your practice. As always, feel free to send any questions or comments to 
reports@pitchbook.com. 
4 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Sourcing for better value
Overview
European PE activity
Median PE deal size ($M)
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Deal value remains strong
201.8 billion (estimated) of 
capital was invested over 1,209 
(estimated) deals throughout 
Europe during the first half of the 
year. If the current pace continues, 
we will see a 23% decrease in 
the number of deals, but the 
amount of capital invested will 
be nearly even with 2016. Given 
fewer deals but greater capital 
flows, it is unsurprising that the 
median deal size trended upward 
to 29.3 million, the highest 
median in our dataset since 2007. 
B2B companies continue to be 
the sector of choice for PE firms, 
accounting for 36% of all deals 
completed this year. However, 
IT continues to see increased 
activity, accounting for 21% of 
deals completed. That proportion 
is well above the 10-year average 
of 13% of deals annually. We are 
witnessing a similar trend globally 
as PE firms, faced with high 
valuations and stiff competition, 
search for companies with higher 
margins and greater growth 
potential.
Multiples fall
Despite greater deal sizes, median 
valuation/EBITDA multiples fell to 
8.3x on deals completed through 
the first half of the year, which 
is the lowest median valuation/
EBITDA multiple since 2013. This 
is nearly a full 1x cheaper than in 
2016. We believe a steep decline 
in strategic acquisitions helped 
ease pricing pressures for PE 
acquisitions through the first two 
quarters. PE deal flow is expected 
to strengthen through the rest of 
the year for four reasons.
227100201234225247358476370183201.8 est.
2,400
1,617
2,275
2,611
2,451
2,552
3,005
3,344
3,132
1,209
2008
2009
2010
2011
2012
2013
2014
2015
2016 2017*
Deal Value (B)
Es mated Deal Value ($B)
# of Deals Closed
Es mated # of Deals Closed
$25
$29.3
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
5 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Sourcing for better value
Overview, continued
Median European PE buyout multiples
UK PE activity
Source: PitchBook. *As of 6/30/2017. Note: The sample size for debt percentages was insufficiently 
robust on a normative basis, hence the asterisk.
5.0x2.7x3.9x4.3x4.1x4.4x5.4x5.1x5.2x4.7x*4.3x2.6x4.2x4.3x4.1x3.5x4.0x4.0x4.1x3.6x9.3x
5.3x
8.1x
8.6x
8.3x
7.9x
9.4x
9.0x
9.2x
8.3x
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
Debt/EBITDA
Equity/EBITDA
Valua on/EBITDA
512350505058851088952617
405
623
674 674
794
916
1,024
930
410
2008
2009
2010
2011
2012
2013
2014
2015
2016 2017*
Deal Value (B)
Deal Count
Source: PitchBook. *As of 6/30/2017
One, the political uncertainty 
surrounding the European Union 
during 2016 continues to fade. 
Second, valuation multiples have 
decreased. Third, European PE 
firms hold 195.1 billion in dry 
powder as of the end of 2016. 
Lastly, loose credit policies 
have provided steady leverage 
opportunities, evidenced by the 
fact median debt levels remain 
unchanged with a roughly 56% 
debt-to-equity ratio since 2010.
What Brexit?
The UK region saw 51.8 billion 
in total value over 410 deals, 
signifying positive change in 
terms of PE activity since the 
vote to exit the EU. This equates 
to 36% of all deals completed in 
Europe so far this year and is well 
above the long-term average of 
28%. Without a change in that 
current trend, UK companies are 
on pace to receive the greatest 
percentage of PE deal flow in 
our dataset. PE investors remain 
optimistic about the UK economy 
despite the continuing narrative 
suggesting negative economic 
consequences as withdrawal from 
the EU moves forward.
6 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
US-based investor activity w/o European investor 
participation
European PE activity with US-based investor 
participation
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
US PEGs ramping up
US-based Investor Activity
7027556171691131528855424
268
358
459
446
451
610
657
584
224
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value (B)
# of Deals Closed
22112934323465685137187
116
185
237
220
238
322
341
294
128
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value (B)
# of Deals Closed
US firms look abroad
20% of deals completed in Europe 
during the first half of the year 
included some form of capital 
from US investors, totaling 224 
deals and 55 billion in deal 
value. This is up about 2% from 
the historical average of 18%, but 
the most interesting aspect of 
this data point is that a full 11% of 
deals completed in Europe were 
completed without a European 
counterpart. Deals without any 
European PE firm's participation 
accounted for 37.2 billion in deal 
value over 128 deals. This is partly 
driven by US investors looking for 
cheaper markets and partly driven 
by a tightening of the dollar-euro 
exchange rate since 2014. Activity 
along this front will require the 
currency pair to stay closer 
to parity for US firms to fully 
capitalize on cheaper markets in 
the EU. However, as US PE firms 
complete an increasing number 
of acquisitions in Europe and 
become more familiar with the 
legal and regulatory complexity 
of operating within the EU, those 
barriers to entry are eroded. Due 
to this, and barring any major 
changes in the exchange rate, we 
expect US investor-only activity 
to increase in volume moving 
forward.
What does this mean for 
European investors?
Historically, European PE 
investors have benefited 
from club deals involving US 
investors by providing regulatory 
and regional expertise for 
inexperienced US investors 
in exchange for the ability to 
spread equity contributions 
among multiple investors. As 
US investors continue venturing 
off on their own in increasing 
numbers, valuation multiples 
could increase in Europe as ever-
intensifying foreign competition 
drives prices higher. This is 
another reason why we expect 
European deal flow to finish out 
the second half of the year strong.
7 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
IT deal value grows significantly 
European PE deals (B) by sector
B2B drives transaction count 
European PE deals (#) by sector
Deals of 500M+ account for over 50% of 2017 value
European PE deals (B) by size
Smaller deals still make up most transaction volume 
European PE deals (#) by size
IT remains in focus
Deals by Sector & Size
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008200920102011201220132014201520162017*2.5B+
1B-2.5B
500M-1B
100M-500M
25M-100M
Under 25M
0
100
200
300
400
500
600
2008200920102011201220132014201520162017*2.5B+
1B-2.5B
500M-1B
100M-500M
25M-100M
Under 25M
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008200920102011201220132014201520162017*B2B
B2C
Energy
Financial Services
Healthcare
IT
Materials & Resources
0
100
200
300
400
500
600
2008200920102011201220132014201520162017*B2B
B2C
Energy
Financial Services
Healthcare
IT
Materials & Resources
8 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Exits continue to slide
Exits
Tending to be off pace
European PE-backed exits
SBOs on the rise
European PE-backed exits (B) by type
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
Difficulties in selling ahead?
In the first half of the year, exits 
continued a downward trend that 
began in 2015 with 76.7 billion 
in exit value over 471 deals. This 
is on pace to see a 22% decrease 
in volume and 17% decrease in 
value. Despite cooling, exits 
are still strong on a historical 
basis. We don't expect exit 
volume to fall much further as 
32% of all European companies 
sponsored by PE firms were 
acquired over five years ago. For 
years, distributions from general 
partners to limited partners far 
outpaced contributions. However, 
that trend is reversing as exits 
slow and LPs continue to commit 
record amount of capital to PE 
firms. If exits continue trending 
downward and older inventory 
continues building, it will be 
more difficult to unload inventory 
should a large percentage of PE 
firms seek liquidity within a short 
timeframe.
Corporate buyers retreat
The biggest driver causing 
exits to fall is the retreat by 
corporate acquirers, which is 
surprising given the continued 
strength of corporate earnings 
throughout major European 
markets. Corporate acquisitions 
accounted for 41.6 billion in exit 
value across 206 exits, which 
represents 54% of all deal value 
but only 44% of deals by count. 
This is on pace for a 33% decrease 
in both exit value and number. 
Secondary buyouts are on pace 
to decline 7% in volume, now 
making up 52% of all exits with 
31 billion in exit value over 245 
deals. As the percent of company 
9426611188019217920418677701
509
716
933
835
1,053
1,127
1,341
1,200
471
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Exit Value (B)
# of Exits
0
50
100
150
200
250
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Corporate Acquisi on
IPO
Secondary Buyout
inventory held greater than five 
years increases, sponsor-to-
sponsor sales are becoming a 
more prominent exit option as PE 
firms begin looking for liquidity in 
current investments.
9 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
On pace for decade high
Fundraising
Decade high in funds hitting their targets
European PE funds (#) hitting target
Median European PE fund size (M)
2017 pacing to surpass last year's fund count, just barely
European PE fundraising
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
Commitments still pour in
PE fundraising worldwide 
continues to boomEurope is no 
different with 41.6 billion raised 
this year across 54 funds. This is 
not only on pace to surpass 2016 
fundraising numbers by 16%, but 
also looking to exceed the total 
raised in 2007. On top of those 
strong numbers, 88% of funds 
hit their target, up from last year 
and the highest percentage in our 
dataset.
Median fund sizes are down
After reaching the highest mark 
in our dataset, median fund 
sizes are down 27% through 1H. 
This is mostly due to a smaller 
number of 1 billion+ funds 
closed when compared to 1H 
2016. The only mega-fund to 
close in Europe in 2Q was the 
massive $16 billion buyout fund 
raised by CVC Capital Partners. 
This is vastly different than the 
fundraising scene in the US, 
where median fund sizes are up 
to record levels this year and 
mega-funds continue to dominate 
the landscape. LP contributions 
to PE will continue to increase 
throughout the rest of the year. 
However, distributions have been 
on a downward trend. If exits 
continue to slow, contributions 
will surpass distributions for the 
first time since 2010. Should this 
occur, the fundraising craze of the 
last few years will finally begin 
slowing.
797850412338316147537242191
188
156
113 105 112
99
109
97
88
94
54
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Capital Raised (B)
# of Funds Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Hit Target
Missed Target
225.0
249.0
0
50
100
150
200
250
300
350
400
450
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Buyout Funds
All PE Funds
400.0
342.6
10 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Firm name
Date
Size (M)
Investor(s)
HQ
Sector
Alight Solutions
1/5/2017
$4,800
The Blackstone Group
London
BPO/Outsource 
Services
OT Morpho
31/5/2017
2,420
Advent International
Paris
Systems & Information 
Management
Xella International
11/4/2017
2,200
Lone Star Funds
Duisburg
Building Products
Mauser Group
3/4/2017
$2,300
Stone Canyon Industries
Brhl
Packaging
Cerba HealthCare
20/4/2017
2,000
Partners Group, Public Sector Pension 
Investment Board
Cergy-Pontoise
Laboratory Services
Firm name
Date
Size (M)
Type
Former Investor(s)
HQ
Sector
Host Europe
3/4/2017
$1,820
M&A
Cinven, Oakley Capital Private 
Equity
Cologne
Internet Service 
Providers
Zabka Polska
21/4/2017
$1,580
Secondary 
Buyout
CVC Capital Partners
Poznn
Department Stores
Vanderlande 
Industries
18/5/2017
1,200
M&A
NPM Capital
Veghel
Logistics
Beacon Rail Leasing
9/4/2017
855
Secondary 
Buyout
Pamplona Capital Management
London
Rail
Antarius
1/4/2017
425
M&A
Aviva
Paris
Life & Health 
Insurance
Fund name
Firm
Close date
Size (M) HQ
CVC European Equity Partners VII
CVC Capital Partnesr
1/6/2017
16,000
London
Vitruvian Investment Partnership III
Vitruvian Partners
29/6/2017
2,400
London
Chequers Capital XVII
Chequers Capital
17/5/2017
1,100
Paris
Adelis Equity Partners Fund II
Adelis Equity Partners
9/6/2017
600
Stockholm
MCH Iberian Capital IV
MCH Private Equity
5/4/2017
300
Madrid
Select largest PE-backed exits in 2Q 2017
Select largest PE buyouts in 2Q 2017
Select largest closed PE funds in 2Q 2017
Source: PitchBook
Source: PitchBook
Source: PitchBook
League tables
2Q 2017
11 
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Methodology
Deals
PitchBook only tracks closed 
transactions, not rumored or 
announced deals. All unknown 
deal values are extrapolated from 
known transaction values. The 
eligible PitchBook transaction types 
are all buyout types, PE growth 
investments and investor buyouts by 
management.
Deal Flow Estimation
Due to the nature of private market 
data, information often does not 
become available until well after a 
transaction takes place. To provide 
the most accurate data possible, 
we estimate how much of this new 
information will become available in 
the next quarter by calculating the 
average percentage change in deal 
flow from the first to the second 
reporting cycle over the trailing 24 
months. We then add this estimate 
to the reported figure for the most 
recent quarter. Both the original 
reported figure and the estimated 
figure are provided for your 
reference. 
Exits
PitchBook only tracks completed 
exits, not rumored or announced. 
Exit value is not extrapolated. Initial 
public offering (IPO) size is based 
on the initial price that the company 
sets multiplied by the number of total 
shares outstanding.
Fundraising
Unless otherwise noted, PE fund 
data includes buyout, co-investment, 
diversified PE, energy  alternative/
renewables, energy  oil & gas, 
mezzanine, mezzanine captive, 
growth and restructuring/turnaround 
funds. Fund location is determined by 
specific location tagged to the fund 
entity, not the investor headquarters. 
Only closed funds are tracked.
Geographical Scope
Only transactions involving 
companies headquartered in Europe 
are included.
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PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
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