Preqin: Private Equity Deal Activity Maintains Momentum In Q3/17

Oct 6 2017 | 9:15pm ET

Buyouts backed by private equity firms maintained momentum in the third quarter, according to new data from Preqin, as a spike in Asian activity offset declines in North America and Europe.

The industry saw 953 deals worth an aggregate $92 billion in the quarter, Preqin said, compared with 1,047 deals worth an aggregate $93 billionin the second quarter. Third quarter numbers are expected to rise slightly as more information becomes available, Preqin said. When added with first and second quarter activity, 2017 remains on course to record aggregate deal values similar to 2016. 

The third quarter stats were published in Preqin’s Q3 2017 Private Equity-Backed Buyout Deals and Exits factsheet. Key highlights from the report: 

  • North America represented the largest proportion of buyout deal activity and saw 513 deals announced worth $36 billion. Europe recorded 350 deals worth $20 billion, and Asia recorded 39 deals worth $32 billion. 

  • However, North America saw the largest decrease in deal activity from Q2, as aggregate deal value dropped from $62 billion last quarter. 

  • By contrast, Asia buyout deal value jumped from $9 billion in Q2 2017 to $32 billion in Q3, accredited to two deals: the Global Logistic Properties Limited deal worth SGD 16 billion ($12 billion), and the Toshiba Memory Corporation deal worth JPY 2,000 billion ($18 billion) - the largest Asia-focused buyout deal ever. 

  • Although public-to-private deals only represented 1% of financings announced this quarter, it represented 26% of aggregate deal value. 

  • Industrials represented the largest proportion of number of deals at 22%, while information technology represented the largest proportion of aggregate deal value at 35%. 

  • Private equity buyout-backed exit activity fell for the fifth consecutive quarter, as 381 exits were recorded worth $65 billion. 

  • North America saw 182 exits with an aggregate exit value of $35 billion while Europe saw 152 exits worth $20 billion. 

  • Trade sales accounted for over half (59%) of exits and over two-thirds (68%) of the exit value. 

  • The largest private equity-backed exit announced this quarter was the trade sale by the portfolio company Lightower which was acquired by CCIC for $7.1 billion. 

“Not only did the private equity-backed buyout industry match the deal activity of Q2, aggregate deal value also increased by $37 billion from Q1,” said Christopher Elvin, head of private equity products at Preqin. “Assuming that the industry is able to maintain its momentum into the last quarter of the year, annual deal activity in 2017 should be on par with the levels seen the year before. 

“Europe continues to see a slowdown in buyout deal activity in the quarter, but North America saw the steepest decline,” he added. “By contrast, with the Toshiba Memory Corporation buyout deal announced this quarter worth close to $18 billion, Asia buyout deal activity saw a sharp spike in deal value, although the number of deals decreased slightly.” 

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