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EMEA Deal-Making Revival in Q2 2021

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EMEA Deal-Making Revival in Q2 2021

Highlights

Eight mega deals (valued at €1.0bn or more) with an aggregate value of €18.6bn were entered by EMEA-based GPs during the second quarter, compared with six deals with an aggregate value of €14.3bn in Q2 2020.

EMEA Deal-Making Revival in Q2 2021

Global General Partners’ (GPs’) capital deployed into EMEA targets accelerated 137% year-over-year, from €18.2 in Q2 2020 to a total of €43.1bn in Q2 2021. On the other hand, the number of completed deals increased by only 22% year-over-year, from 1,361 in Q2 2020 to 1,666 in Q2 2021, indicating an increase in more sizeable deals. The revival of large deals (those valued at €1.0bn or more) in the second quarter of 2021 saw five companies changing ownership; by comparison, there were only three during the same quarter last year, mainly due to COVID-19.

All but two regions, Africa and Southern Europe, recorded an increase in deal activity, as well as mid to high double- or even triple-digit growth in deal values. Nordic-based targets were once again absolute leaders, reporting growth in deal value amounts and receiving €4.9bn across 185 completed deals, compared with €578m across 126 completed deals in Q2 2020 and 132 completed deals receiving €2.6bn in Q4 2020 respectively. Similarly, aggregate deal value in the U.K. jumped 254% to €14.9bn across 410 completed deals in Q2 2021, compared with a soft €4.2bn across 301 completed deals in the same quarter last year. The Middle East PE entries recorded a fantastic quarter, with 154 completed deals in Q2 2021, versus 132 in Q2 2020, and a 216% increase in deal value, totalling €3.9bn.

In terms of industry sector, IT once again led the way, with 627 closed deals and an aggregated €11.3bn of capital deployed, representing an increase of €7.3bn compared with the same quarter last year. However, the Industrials, Healthcare and Consumer Staples sectors also experienced a noticeable increase in deals, with 30, 88 and 51 more closed deals, respectively, and a total of €18bn of additional capital deployed, compared with Q2 2020.

Divestment activity in EMEA saw a 42% increase in GP exit deals (187 to 265 deals), while aggregate capital realized remained unchanged during the second quarter of 2021, sitting comfortably at €31bn. Three notable €1.0bn+ exit deals involved Nordic targets: the trade sales of Nets A/S to Nexi S.p.A. and Itiviti AB to Broadridge Financial Solutions, Inc., respectively (see Table 1) and the IPO of Oatly Group AB.

Table 1: Completed exit deals in EMEA valued at €1.0bn or more in Q2 2021

Target Name

Target Region

Primary Industry

Buyer

Seller

Deal Value (€bn)

Nets A/S

Denmark

Data Processing and Outsourced Services

Nexi S.p.A.

Investor Group

€7.5

GW Pharmaceuticals plc

U.K.

Pharmaceuticals

Jazz Pharmaceuticals plc

Mentor Capital, Inc.

€6.0

Itiviti AB

Sweden

Application Software

Broadridge Financial Solutions, Inc.

Nordic Capital

€2.1

Tele Columbus AG

Germany

Cable and Satellite

Morgan Stanley Infrastructure Inc.

Investor Group

€2.0

Grupo T-Solar Global, S.A.

Spain

Renewable Electricity

Cubico Sustainable Investments

I Squared Capital Advisors, LLC

€1.5

The Capital Markets Company (UK) Ltd.

U.K.

Research and Consulting Services

Wipro Limited

Clayton, Dubilier & Rice, LLC

€1.2

Source: S&P Global Market Intelligence. For illustrative purposes only.

North America captures EMEA GPs’ attention

EMEA-based GPs’ aggregate capital deployed globally increased by a whopping 102% to a total of €76.7bn in the quarter, compared with €38bn in Q2 2020. The number of completed entry deals only increased by 43% year-over-year, from 1,562 to 2,231. Eight mega deals (valued at €1.0bn or more) with an aggregate value of €18.6bn were entered by EMEA-based GPs during the second quarter, compared with six deals with an aggregate value of €14.3bn in Q2 2020. Five of the top ten EMEA GP entry deals involved North America targets, with four of those deals conducted as club deals.

Table 2: EMEA-based GPs’ completed entry deals valued at €1.0bn or more in Q2 2022

Target Name

Target Region

Primary Industry

Buyer

Deal Value (€bn)

Pluralsight, Inc.

U.S.

Application Software

Vista Equity Partners Management, LLC; Partners Group Holding AG

€4.0

Birkenstock Productions Rheinland-Pfalz GmbH

Germany

Footwear

L Catterton Partners; Financière Agache Société Anonyme

€4.0

Northvolt AB

Sweden

Electrical Components and Equipment

Investor Group

€2.3

Waymo LLC

U.S.

Application Software

Investor Group

€2.0

ADVANZ PHARMA Corp. Limited

United Kingdom

Pharmaceuticals

Nordic Capital

€1.8

Weichai Power Co., Ltd.

China

Construction Machinery and Heavy Trucks

Investor Group

€1.6

Exeter Property Group, LLC

U.S.

Asset Management and Custody Banks

EQT AB (publ)

€1.5

Beijing Horizon Robotics Technology Co., Ltd.

China

Semiconductors

Investor Group

€1.2

Source: S&P Global Market Intelligence. For illustrative purposes only.

Aggregate capital deployed by EMEA-based GPs to cross-border targets increased 77% year-over-year, from €25.3bn in Q2 2020 to €44.8bn in Q2 2021, with the number of completed deals rising 107% year-over-year, from 336 in Q2 2020 to 695 in Q2 2021. Simultaneously, investments in EMEA-based targets also increased from $12.7bn to €31.9bn in the last quarter, compared with the same quarter last year. The number of completed deals, however, has only risen by 25%, from 1,226 to 1,536. EMEA-based GPs’ capital deployed into the IT sector increased three-fold to €30bn, from only €9.6bn in the same quarter last year.

EMEA-based GPs’ aggregate capital realized from divestments remained stable year-over-year at €23.5bn, compared with €26.3bn in Q2 2020, despite the number of completed exit deals decreasing 52% year-over-year, from 191 in Q2 2020 to 291 in Q2 2021. Six large exits deals valued at a total of €13.9bn were completed by EMEA-based GPs during the fourth quarter, including two IPOs.

Table 3: EMEA-based GPs’ completed exits deals involving cross-border targets valued at €1.0bn or more in Q2 2021

Target Name

Target Region

Primary Industry

Buyer

Seller

Deal Value (€bn)

Auth0, Inc.

North America

Application Software

Okta, Inc.

Investor Group

€5.4

Itiviti AB

Nordics

Application Software

Broadridge Financial Solutions, Inc.

Nordic Capital

€2.1

DivvyPay, Inc.

North America

Application Software

Bill.com Holdings, Inc.

Investor Group

€2.1

Tele Columbus AG

Germany

Cable and Satellite

Morgan Stanley Infrastructure Inc.

Investor Group

€2.0

Oatly Group AB

Nordics

Packaged Foods and Meats

IPO

-

€1.2

UiPath Inc.

North America

Systems Software

IPO

-

€1.1

Source: S&P Global Market Intelligence. For illustrative purposes only.

Deal making within the VC segment has been record-breaking. Global VCs deployed €12.2bn of capital in the EMEA region across 1040 deals during the quarter, three times higher than the €3.7bn across 865 deals in Q2 2020 and the highest amount in deals and deal value ever recorded in a single quarter. Financials and Healthcare sectors were the focus of investments among VC firms, with prime targets predominantly in the U.K., the Nordics, France and Germany.

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