Private equity-backed buyout deals totaled $89 billion in the second quarter, up significantly from the $50 billion in aggregate deal value recorded in the first quarter, according to Preqin, the alternatives data provider.
Preqin noted, however, that even though it expected this total to rise by 5% to 10% as more data become available, global deal value does not match the $102 billion seen in the 2015 second quarter.
Still, the 1,004 deals announced in the latest April-to-June period did exceed the 940 deals recorded in the previous three months, and represented the highest quarterly figure since Q4 2014.
The private equity buyout-backed exit market expanded in the second quarter, as 434 exits were announced globally, worth a combined $90 billion. This represented an 18% increase in the number of exits and a 33% increase in exit value from the previous quarter.
By comparison, in the same period last year, 453 exits were announced globally, worth a total $126 billion.
Deals and Exits
North America and Europe accounted for 89% of the deal flow in the second quarter, 534 and 356 deals, respectively. However, the $57 billion aggregate deal value for North America was more than double the $25 billion seen in Europe.
Leveraged buyouts represented 40% of deals in the second quarter, and 53% of aggregate deal value. Although the 16 public-to-private deals in the quarter accounted for just 2% of the number of deals, they represent 21% of total deal value.
Information technology deals made up 24% of aggregate deal value in Q1, down from 28% in Q1. Deals in the industrials sector represented 22% of the number of deals, but were worth just 9% of the aggregate value in the quarter.
Trade sales represented half the number of exits and 51% of the aggregate exit value in Q2. IPOs and private placements of buyout-backed companies tripled from low levels in the previous quarter.
The biggest buyout-backed deal in Q2 was also the largest exit: the $7.5 billion May sale of MultiPlan Inc. from investors Ardian, Partners Group and Starr Investment Holdings to a consortium of GIC, Hellman & Friedman and Leonard Green Partners.
“The first quarter of 2016 was a period of relatively low activity for the private equity buyout deals market, with both the number of deals globally and the aggregate deal value falling,” Preqin’s head of private equity products, Christopher Elvin, said in a statement.
The second quarter saw a significant uptick in overall deal value, Elvin said, “a sign that managers are returning to the levels of pricing and competition seen through much of 2015.”
The buyout-backed exit environment also is beginning to approach the levels seen throughout 2015, he said.