EMEA PRIVATE EQUITY - S&P Global...EMEA PRIVATE EQUITY MARKET SNAPSHOT Pressure from Strategic...

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EMEA PRIVATE EQUITY Market Snapshot

SEPTEMBER 2014 │ ISSUE 3

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EMEA PRIVATE EQUITY MARKET SNAPSHOT

Editors’ Note

Welcome to the third issue of EMEA Private Equity Market Snapshot, a quarterly

publication focusing on the private equity (PE) market in Europe, the Middle

East, and Africa (EMEA).

In this issue, in addition to examining how the EMEA PE market as a whole

performed in the first half of 2014, we focus on two notable trends. Firstly, we

look at recent growth in the Spanish market and the decline seen in the French

market. We then analyse the increased interest Asian private equity investors

have shown in acquiring EMEA target companies since the financial crisis, and

explore some of the potential driving forces behind this trend.

In the appendix of each issue is a data pack which provides a top-down view of

the market compared to its position at the same point in time last

year. Included in the data pack are charts showing transaction numbers and

volumes among EMEA-based PE and venture capital (VC) targets, transaction

volumes and deal counts undertaken by EMEA-based PE firms and VCs, and

sector-level multiples for private equity and the region’s broader merger and

acquisition market.

At the heart of our analysis is the S&P Capital IQ platform which incorporates a

database capturing more than 3.1 million historical transactions, including deal

values and transaction multiples, target company fundamental data, sector-

level financials, and comprehensive private equity manager and fund

information.

We look forward to receiving feedback and suggestions on regions or sectors of

interest for future analysis. To subscribe or comment on the EMEA Private

Equity Market Snapshot, email [email protected].

Authors

Silvina Aldeco-Martinez

Managing Director

Product & Market Development EMEA,

S&P Capital IQ

Paul Bishop

Senior Research Analyst,

S&P Capital IQ

Ian Hazard

Team Leader, Private Equity Research

S&P Capital IQ

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Pressure from Strategic Buyers Slowing EMEA GPs’ Pace of

Investment in Q2

Capital deployments by EMEA private equity (PE) firms have slowed in Q2 2014

compared to last year’s numbers. Firms based in EMEA have made 1,157 new

investments to a value of €19.8bn in Q2 2014. This represents a 10.4% decrease

on the number of investments made in Q2 2013 and a 30.7% decline on the

€28.6bn deployed. More recently, there was further deceleration in July and

August compared to the same period in 2013. Between January and August

2014, EMEA general partners (GPs) made 2,793 investments deploying €58.6bn

in new capital, compared to 3,007 new deals between January and August 2013

with €62.2bn deployed. The 7.1% decrease in count and 5.8% decrease in new

capital in 2014 to-date are largely due to a particularly poor Q2. EMEA GPs

invested €8.8bn less in Q2 2014 than in 2013 over 135 fewer deals. The

increased competition from strategic M&A buyers coming to the market since

2013 could be a potential factor that has prompted this slowdown in deal

making. This is especially relevant when considering that strategic investors

offer a very different value proposition to target companies in comparison to

their private capital counterparts and the pent up demand in the market for

these investors over previous years.

Q2 2014 was also disappointing for EMEA GPs in terms of capital realisation, with

exit volume decreasing by 64.5% to €29bn compared to Q2 2013, and exit

counts down by 4% to 381. However, July and August 2014 seem to have broken

this negative trend with deal volume €15bn above the level in July and August

2013.

The largest investment involving an EMEA- based firm in Q2 2014 was the €1.7bn

investment by Silver Lake, William Morris Endeavor Entertainment, LLC and

Mubadala Development Company PJSC into IMG Worldwide, Inc. (a large US

corporation in the movies and entertainment industry). The largest exit involving

an EMEA located firm in Q2 2014 was the €2.1bn sale of AZ Electronic Materials

S.A. by a consortium including Merrill Lynch & Co., Inc., Mondrian Investment

Partners Limited, Standard Life Investments Limited and Threadneedle Asset

Management Limited. Taking a sector view, consumer discretionary attracted

the largest amount of capital with €4.1bn invested in Q2 2014 (€1bn more than

in Q2 2013) while the healthcare sector showed a slow-down, with EMEA-based

firms making 152 investments totaling €1.9bn of invested capital – a decrease

of 19.7% compared to Q2 2013. Despite a 15.6% increase in deal count, private

equity exits in information technology companies showed the biggest decline in

Q2 2014, with only €3.3bn realised from the sector compared to €5.9bn in 2013.

Figure 1. For Illustrative Purposes Only.

Source: S&P Capital IQ platform. As at 18th September 2014

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan -

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2014

Strategic M&A Buyer Transactions 2004 - 2014 YTD

Deal Volume (€bn) Count (Secondary Axis)

Deal Count

Transaction Volume (€bn)

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European Targets Show Lackluster Performance

A similar slowdown in Q2 deal count and volume is detectable in EMEA-based

target companies. Q2 2014 entry deal volume for EMEA-based targets stands at

€21.8bn, a decrease of 39% compared to Q2 2013’s €35.8bn. Deal counts are

also 8.7% lower compared to Q2 2013, standing at 1,130 new deals. At €21.6bn,

the size of entry deals in July and August is also 23% lower than in 2013. As it

stands, we appear to be looking into a weak third quarter performance in terms

of capital deployments.

Capital realisations from EMEA target exits also decreased significantly to 335

divestments realising €25.2bn of capital, a 63.6% decrease on the level of capital

realised in Q2 2013. There is some positive news for exits however, with July-

August exits representing €32.3bn of realised capital - an 87% increase on

2013’s figures for the same period.

According to S&P Capital IQ data, as of 1st September 2014 the biggest trend

emerging from April to August 2014 is around investment levels in France and

Spain. Private equity investment in France has decreased over the course of

2014 and now stands at 68% of the level of capital invested in 2013. In contrast,

Spanish investment volume has increased by 45% and deal count is also 22%

higher. Other regional movements include the increased transaction volume in

Southern Europe which has risen from €0.8bn in Q2 2013 to €4.6bn in Q2 2014,

while deal counts increased 34% to 134 from 100 in Q2 2013. Investment in

targets in the Nordic region have decreased by 18% to 110 in Q2 2014 from 134

in Q2 2013 whilst transaction volumes have decreased by a significant 73.9% to

€0.9bn in Q2 2014 from €3.5bn over the same period in 2013.

Spanish Assets Shine

A recent spate of deals in Spain has pushed deal count and deal volume higher,

and has shifted focus to the acquisition of financial sector assets and real estate.

In H1 2014, there were 16 deals in the financial sector with €5.1bn invested, an

increase on H1 2013’s figures by a third for deal count and 24% for transaction

volume. These transactions are primarily acquisitions in the financials subsector

of real estate development or operating companies. This is a meaningful

diversion from the historical trend where traditionally the industrials sector has

been the most attractive within the region for private equity since the year 2000,

17% of all deals and 24% of all invested capital have been in this sector. Spain is

also historically attractive for its consumer discretionary sector companies, this

time with a clear specialisation in hotel, resorts, and cruise line sector

companies.

Of the €6.3bn invested by private equity companies in 2014 into Spanish targets,

€5.1bn has been invested in real estate operating companies, with the largest

transaction to-date being the Lone Star and JP Morgan acquisition of a portfolio

of Spanish and Portuguese Commercial Property Loans from Commerzbank for

€3.5bn. However, there is also strong evidence of interest from global private

equity in banks, an example of which are the acquisitions made into Banco

Santander and EVO Bank by Warburg Pincus and Apollo Global Management.

There is the potential for further growth of this trend given the continued level of

interest in Spanish assets. Announced transactions in Spanish target companies

and assets stand at 188 for 2014 year-to-date, an increase of 22.9% over the

same period last year. Total outstanding announced deal volume stands at

€2.4bn, suggesting that appetite for Spain is unlikely to wane before year end.


Source: S&P Capital IQ platform. As at 1st September 2014

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January February March April May June July August

Deal Count


Spain Private Equity Entry Transactions

2013 Volume 2014 Volume 2013 Count 2014 Count

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France: Winter Arrives Early

Private equity investment in France has traditionally focused on the consumer

discretionary and industrials sectors with 23.5% and 33.7% of all capital invested

since 2000 assigned to these two sectors, respectively. Consumer discretionary

is also a significantly active sector in terms of deal count, second only to

information technology which includes mostly venture capital (VC) deals with

smaller capital profiles. Within the consumer discretionary sector, France has

traditionally been exceptionally strong in the Apparel, Accessories and Luxury

Goods segment, with €10.2bn invested into the sector since 2000.

However, this year, investment in French consumer discretionary has been out of

favour, with total investment volume over the January – August 2014 period

falling to only €373.5mn, just over a tenth of the €3.5bn in the same period in

2013. Investment in Industrials in 2014 also fell by 23% to €1.7bn, whilst

investment in industrials for growth strategies was down significantly by 82%

suggesting that private equity foresees limited prospects for the industry in the

coming years. Overall, investment for growth purposes other than venture

capital in 2014 has fallen by 50.2% compared to the same period in 2013,

pointing to a significant lack of faith in deploying growth capital to French target

companies, even in the traditionally attractive sectors of the French economy for

PE investors.

The major driver behind the slowdown in private equity capital invested into

France seems to be grounded in the political and economic uncertainty seen over

the course of this year. GDP grew at -0.1% in Q2 2014 (Y-on-Y), missing the

positive forecast projection by 0.3%. These figures show that the French

economy produced no meaningful growth for the second consecutive quarter in a

row, prompting French finance ministers to cut deficit reduction and growth

forecasts for 2014. These figures have highlighted the growing structural

concerns about the French economy and fuelled concerns domestically and

amongst businesses about how tenable the French administration’s policies

are1. As a result, as seen in figure 4, the data indicates that private equity firms

have postponed any growth investment strategy plans in France for 2014.

However, if French stimulus programmes such as the planned €40bn in tax cuts

for businesses manage to restore growth in the stalled economy and tackle rising

unemployment, there is every likelihood that private equity will be quick to return

to this large and cornerstone European deal market.





1 1 “France Long-Term Credit Ratings Lowered to ‘AA’ on Weak Economic Growth Prospects and Fiscal Policy

Constraints”, S&P Ratings, published on 08/11/13, available at https://www.capitaliq.com/CIQDotNet/CreditResearch/SPResearch.aspx?DocumentId=26966795&From=SNP_CRS&srcPgId=1755

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January February March April May June July August

Deal Count


France Private Equity Entry Transactions

2013 Volume 2014 Volume 2013 Count 2014 Count

-4

-2

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2

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015Growth -YoY %

France/Spain Real GDP Growth - Forecast vs. Actual 2013 - 2015

France Forecast France Actual Spain Forecast Spain Actual

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Asia Capital Sun Rising over Europe

Since the financial crisis, Asian2 private equity (PE) investors have shown growing

interest in acquiring EMEA (Europe, Middle East and Africa) target companies,

with a number of key deals generating significant buzz in the market. As shown

in figure 5, in 2013, there were 34 acquisitions of EMEA targets by Asian PE

investors, totaling €8.5 billion in invested capital, a 10-year record when

excluding 2008 as an anomaly3. Looking at figures to-date as shown in figure 6,

H1 2014 has already recorded 23 investments from Asian PE firms into EMEA

targets, resulting in €4.8bn being injected into EMEA, making this the highest

level of investment in the first half of a year since the €5.4bn invested in H1 2010

and signaling that this nascent trend could continue throughout 2014.

Homegrown Cross-Border Experience Tested on Smaller Deals

It is important to note that the Asian PE market covers a wide range of countries and

unique macroeconomic profiles, translating into a wide variety of investment

strategies being adopted by local private equity players. In broad terms, the

spectrum of market participants is centered on two sets of actors; home-grown

private equity firms and funds including regional investment funds such as sovereign

wealth funds and local investment bank PE platforms.

The native home-grown Asian PE firms such as IDG Capital Partners, Ant Capital

Partners Co., and CDH Investments have considerable experience within the region,

but may traditionally lack deep expertise in investing beyond the local region or their

own borders. However, more recently a lot of these firms have recruited private

equity experts with significant expertise in Western markets to their deal teams,

allowing them to gradually begin to look for investment opportunities outside Asia. In

2014 year-to-date, 41% of deals have involved a home-grown PE investor.

2 For the purpose of this article, the analysis was conducted with reference to Asia, specifically including the following countries:

Hong Kong, Japan, South Korea, Singapore, Afghanistan, Armenia, Azerbaijan, Georgia, Iran, Kazakhstan, Kyrgyzstan, Tajikistan,

Turkmenistan, Uzbekistan, China, North Korea, Macau, Mongolia, Taiwan, Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal,

Pakistan, Sri Lanka, Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Philippines, Thailand, Vietnam. 3 The spike in transaction volume for 2008 was primarily driven by several large investments in distressed financial companies

as a result of the global financial crisis. For example, the $8.6 billion invested in Merrill Lynch & Co. by Temasek Capital and

Korea Investment Corp in separate transactions.





5.16.5

28.9

1.7

5.9 6.04.2

8.520

2320

16

28

3841

34

0

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30

40

50

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013

Asia to Europe Private Equity Investment

2006 to 2014 YTD

Transaction Volume (€bn) Count (Secondary Axis)

2.0

4.8

15

23

0

5

10

15

20

25

0

1

2

3

4

5

H1 2013 H1 2014

Asia to Europe Private Equity Investment

H1 2013 vs. H1 2014

Transaction Volume (€bn) Count (Secondary Axis)

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A subset of this home-grown group of actors are the larger regional investment

funds with an active PE mandate, including local investment banks’ PE platforms

such as CICC Capital, or sovereign wealth management institutions such as

Temasek in Singapore and China Investment Corporation.

It is these homegrown PE actors, both private equity firms and regional

investment funds that are driving the trend of investment back into Europe. For

completeness, there are also Asia-focused arms of global private equity firms

such as Carlyle, KKR, and TPG which, by nature of their mandate, primarily focus

on making investments in targets within Asia and therefore do not contribute to

this trend.

Targets in the financial sector have attracted the lion’s share (€23.8bn) of Asian

investments into EMEA between 2006 and August 2014. However, this volume is

significantly buoyed by the €15.3bn invested into distressed European

companies in 2007 and 2008. More recently, this phase of interest in financials

from Asian PE firms has somewhat faded with other sectors moving into the

limelight.

In 2014 year-to-date, there has been greater sector balance than in previous

years, with four of the top ten investments over the past 12 months being

acquisitions in the real estate sector4, displaying a high level of interest from

Asian PE players for European real estate assets. The acquisition of Grohe

Holding GmbH by LIXIL Corporation and the investment arm of the Development

Bank of Japan Inc. for €2.9 billion is the largest transaction to close so far in

2014. Entities in the energy, materials and financials sectors comprise the

remainder of the deals. Notable deals are the significant €679mn invested into

insurance company Rothesay Life Limited, and the €398mn invested into

construction company IHS Nigeria by GIC Special Investments Ltd, the private

equity arm of GIC.

4 Broadgate Estate acquired on 21/01/2014 for €2.9bn, Chiswick Park in West London acquired on 07/01/2014 for €939.8mn,

Marks & Spencer Global Headquarters acquired on 15/11/2013 for €245.9mn, Waterside House in Paddington acquired on

18/11/2013 for €237.4mn according to S&P Capital IQ transaction data as of 20th July.

Investments from Singapore constituted the largest volume of capital, with

€3.4bn invested since 2006. However, in terms of number of deals closed, with

11 acquisitions over the past 12 months, Chinese PE firms have been the most

acquisitive with investments back into Europe.

On the whole, investments made by Asian players into EMEA involve low levels of

capital deployment. Since 2006, as seen in figure 7, 73% of all acquisitions have

been for less than €50mn and 51% for less than €10mn. The majority of

investments are for non-controlling stakes in assets, with 63% of all investments

since 2006 acquiring minority interests in assets. However, there is still some

activity at the other end of the spectrum, as investments and acquisitions in

excess of €1bn have accounted for 6% of the total number of deals.



51%

22%

7% 6%4% 4% 6%

0%

10%

20%

30%

40%

50%

60%

2006 - 2014 YTD Price Brackets

8


One of the driving forces behind smaller deal sizes is the dearth of leverage

sources in Asian PE. Due to restricted lending by Asian banks to fund leveraged

buyouts (LBOs), when LBOs occur, Asian PE firms must resort to offshore debt

financing. Typically they are pushed to contribute up to 50% equity to an LBO

compared to the average 30% contribution from major US PE firms. In this

regard, minority investments can be viewed as risk-averse methods to acquire

exposure to foreign assets whilst also leveraging the expertise of the local

partners.

As Sam Robinson, Head of Asia Private Equity Fund Investment at Aberdeen SVG comments: “Leverage is not plentiful in most Asian markets. There have been some high profile deals done recently in Asia which have been highly leveraged, but I believe that leverage has come from the US.”

Affordable Strategic Targets Fuel Asian Appetite

The industry dialogue suggests that dry powder growth in Asian PE along with a

relative lack of high quality Asian acquisition targets for PE firms has led to a

search for yield outside the region and into Europe. However, this hypothesis

looks at best incomplete. “There have been some articles written recently about the high level of fundraising (and therefore “dry powder”) in Asia. If one looks at overall data (supported by my own experience “on the ground”), fundraising across Asia has remained challenging in 2013 and 2014 as recovering Europe and the US have attracted more capital, and Asian private equity backed exits have been limited” notes Sam Robinson.

Indeed, from 2011 to 2013, Asia-based private equity funds gradually attracted

less capital as a proportion of the total global fundraising amount, falling from

12.9% of total global fundraising in 2011 to 3.2% in 2013. Therefore, whilst the

contribution of dry powder to cross-border investments may be declining, more

strategic reasons appear to be driving these deals.

“In terms of the attractiveness of EMEA assets for Asian private equity, there is a big desire to bring an established Western brand or technology into Asian markets, particularly consumer markets. For example, with Cath Kidston and Pizza Express the strategic motivation was the opportunity to move these

established brands into a large and rapidly growing Chinese market” as Tosh Kojima, Managing Director, DC Advisory comments.



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18

Deal Count by Industry Sector

January - July 2014 vs. January - July 2013

Jan-July 2013

Jan - July 2014

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Considering this, it would seem that there is a palpable feeling that within Asia

there is a significant lack of assets with a strong fit with private equity

investment strategies seeking established brands. A sustained interest in these

consumer focused targets is clear when comparing the deals made between

January and July 2014 to those over the same period in 2013, as seen in figure 8.

Asian acquisitions of EMEA-based consumer sector target companies have

increased by 200%, whilst transaction volume was up 1077% to €182.5mn.

Furthermore, Tosh Kojima notes that, “Interest in European precision engineering and manufactured goods companies is also evident as a result of the move within China and other Asian countries to adopt European industry standards in a variety of industries from automotive, renewable energy equipment to airport infrastructure.”

The observed number of transactions supports this statement - investments in

industrial sector firms have increased by 250% in the period January-July 2014,

and invested capital has risen by €3.3bn from the €4.8mn seen in the same

period in 2013.

A further compelling driver behind the increasing number of Asia-to-Europe

investments appears to be the relatively lower valuations for EMEA-based firms

compared to their Asian counterparts, coincidentally in the consumer, industrial

and materials sectors. S&P Capital IQ data shows significantly lower multiples in

M&A targets within EMEA on average compared to M&A transaction targets in

Asian regions. As shown in figure 9, the average EMEA target company implied

TEV/EBITDA5 has consistently trailed Asian multiples. This highlights the

attractiveness of European assets in addition to their strong fit with PE

strategies.

5 Average implied TEV/EBITDA multiples weighted by industry sectors to account for different valuation profiles between

industries.

2014 Dealmaking Eclipses Regulatory Concerns

This trend appears sustainable considering the size, gentrification and growth

potential of the Asian market. As Asian financial markets continue to integrate

with Western actors and the understanding of cultural differences improves, it is

likely that we will see more Asian capital flowing into attractive EMEA-based and

global targets. The number of announced transactions between January and

July 2014 is 26% higher than the same period in 2013, and announced

transaction volume has also increased by €500mn suggesting that momentum

is continuing to build in this space.

However, there are still some barriers to overcome. “Traditionally Europeans, compared to the US, have been more open to approaches by the Asians, but cultural barriers still exist. Banks and other EMEA market participants are becoming more familiar with Asian private equity players but a deep and increased understanding of cultural differences is required for this trend to continue growing” suggests Tosh Kojima.


Source: S&P Capital IQ platform. As at 18th September 2014

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2006 2007 2008 2009 2010 2011 2012 2013 2014Average M

&A Implied TEV/EBITDA (x)

Average M&A Implied TEV/EBITDA Weighted by

Industry Sector

EMEA Asia

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The evidence strongly suggests that European and Asian businesses are

committed to working together to find partners across the cultural divide. Asian

investors have continually opted to allocate capital to European acquisitions over

US based targets, as the data shows. For example, transaction volume from

Asian PE firms to the US since 2006 totals €8.9bn, whereas the equivalent for

volume to EMEA stands at €52bn. This difference is even more pronounced in

recent years’ numbers; 2014 transactions into the US total €1bn, whereas

European deals total€4.34bn.

Geopolitical considerations are the main limiting factor to this trend, as they may

hamper deal making when state money is deployed in larger acquisitions or when

governments implement measures to protect domestic economies. Western

governments have been particularly sensitive to cross-border deals in the

telecommunications and defense sectors, as exemplified by the US House of

Representatives 2012 report which elucidates concerns around acquisitions in

telecommunications by Chinese firms.6 These concerns are likely to overshadow

acquisitions by Asian private equity firms in EMEA too, as suggested by the

European Union’s recent discussions around the establishment of an EU

equivalent of the US Committee on Foreign Investment in the US (CFIUS),

specifically in response to increasing Chinese investment in the EU7. In addition,

changes to economic policy in China have the potential to affect the

attractiveness of Asian PE investments into EMEA. In this regard, the recent

removal of the moratorium on Chinese IPOs8, as well as a growing trend to

develop and promote domestic brands, may affect the cross-border trend by

increasing the attractiveness and number of domestic targets in Asia.

6 Investigative Report on the US National Security Issues posed by Chinese Telecommunications Companies Huawei and ZTE,

Published October 8th, 2012, available at: https://intelligence.house.gov/sites/intelligence.house.gov/files/documents/Huawei-

ZTE%20Investigative%20Report%20(FINAL).pdf

7 Motion for a Resolution on the EU-China negotiations for a bilateral investment agreement, subsection 4, specifically to

examine the establishment of a body to monitor foreign investment in the European Union similar to CFIUS, October 2nd 2013,

available at: http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=B7-2013-0439&language=EN

8 “Alibaba: Paving the Way for a Revitalized Chinese IPO Market – Philip Green, S&P Capital IQ - March 2014, available at:

http://www.institutionalinvestorchina.com/arfy/uploads/soft/140405/32320_0915221531.pdf

Despite the potential headwinds, S&P Capital IQ data suggests that this cross-

regional Asia-Europe investment strategy has established itself securely in the

marketplace. The growth in deal numbers and volumes, as seen in figure 9,

reinforces the general view that this trend is set to expand.

Tosh Kojima is a Managing Director responsible for Asia-Europe deals at DC Advisory, a pan-European corporate finance house offering advice in Mergers and Acquisitions, Debt Raisings, Restructuring, and Public Offerings.

Sam Robinson is Head of Asia Private Equity Fund Investment for Aberdeen SVG Private Equity, a private equity fund management and advisory business.

11

DATA PACK

For Illustrative purposes only. Source: S&P Capital IQ. As at 1st September 2014

PE-EMEA Based Targets

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300

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400

Q2 2013 Q2 2014

Number of Private Equity Entry Transactions by Region

Q2 2013 vs. Q2 2014

BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

0

2

4

6

8

10

12

Q2 2013 Q2 2014

Aggregate Private Equity Entry Transaction Values by Region

(€bn) Q2 2013 vs. Q2 2014

BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

0

20

40

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100

120

Q2 2013 Q2 2014

Number of Private Equity Exit Transactions by Region

Q2 2013 vs. Q2 2014

BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

0

10

20

30

40

50

60

Q2 2013 Q2 2014

Aggregate Private Equity Exit Transaction Values by Region

(€bn) Q2 2013 vs. Q2 2014

BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

12

DATA PACK


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Q2 2013 Q2 2014

Number of Private Equity Entry Transactions

by Industry Q2 2013 vs. Q2 2014

Consumer Discretionary

Consumer Staples

Energy

Financials

Healthcare

Industrials

Information Technology

Materials

Telecommunication Services

Utilities

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2

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8

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12

Q2 2013 Q2 2014

Aggregate Private Equity Entry Transaction Values

by Industry (€bn) Q2 2013 vs. Q2 2014


Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

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70

80

90

Q2 2013 Q2 2014

Number of Private Equity Exit Transactions



Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

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10

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35

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45

50

Q2 2013 Q2 2014

Aggregate Private Equity Exit Transaction Values



Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

13

DATA PACK


0

50

100

150

200

250

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450

Q2 2013 Q2 2014

Average Entry Transaction Size by Region

(€mn) Q2 2013 vs. Q2 2014

BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

0

50

100

150

200

250

300

350

400

Q2 2013 Q2 2014

Average Entry Transaction Size by Industry

(€mn) Q2 2013 vs. Q2 2014


Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

200

400

600

800

1000

1200

1400

1600

Q2 2013 Q2 2014

Average Exit Transaction Size by Region

(€mn) Q2 2013 vs. Q2 2014

BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

0

500

1000

1500

2000

2500

3000

3500

4000

Q2 2013 Q2 2014

Average Exit Transaction Size by Industry

(€mn) Q2 2013 vs. Q2 2014 Consumer Discretionary

Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

14

DATA PACK


PE – EMEA GP’s

0

50

100

150

200

250

300

350

400

Q2 2013 Q2 2014


by Region Q2 2013 vs. Q2 2014 Asia/Pacific Developed Markets

BeNeLux

Caribbean

Central America

Eastern Europe

Far East

Indian Sub-Continent

Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe0

20

40

60

80

100

120

Q2 2013 Q2 2014


by Region Q2 2013 vs. Q2 2014

Asia/Pacific Developed Markets

BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe

0

1

2

3

4

5

6

7

8

Q2 2013 Q2 2014


by Region (€bn) Q2 2013 vs. Q2 2014 Asia/Pacific Developed Markets

BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe0

10

20

30

40

50

60

Q2 2013 Q2 2014


by Region (€bn) Q2 2013 vs. Q2 2014 Asia/Pacific Developed Markets

BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe

15

DATA PACK


0

100

200

300

400

500

600

Q2 2013 Q2 2014




Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

1

2

3

4

5

6

7

8

Q2 2013 Q2 2014




Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

10

20

30

40

50

60

70

80

90

100

Q2 2013 Q2 2014




Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

5

10

15

20

25

30

35

40

45

50

Q2 2013 Q2 2014




Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

16

DATA PACK


0

100

200

300

400

500

600

700

Q2 2013 Q2 2014

Average Entry Transaction Size

by Region (€mn) Q2 2013 vs. Q2 2014 Asia/Pacific Developed Markets

BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe

0

50

100

150

200

250

300

350

400

Q2 2013 Q2 2014


by Industry (€mn) Q2 2013 vs. Q2 2014


Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

500

1000

1500

2000

2500

3000

Q2 2013 Q2 2014

Average Exit Transaction Size

by Region (€mn) Q2 2013 vs. Q2 2014


BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South-East Asia

South America

Southern Europe

Sub-Saharan Africa

Western Europe

0

500

1000

1500

2000

2500

3000

3500

Q2 2013 Q2 2014

Average Exit Transaction Size



Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

17

DATA PACK


VC – EMEA Based Targets

0

20

40

60

80

100

120

Q2 2013 Q2 2014

Number of Venture Capital Entry Transactions

by Region Q2 2013 vs. Q2 2014

BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

0

100

200

300

400

500

600

700

800

900

1000

Q2 2013 Q2 2014

Aggregate Venture Capital Entry Transaction Values


BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe

0

50

100

150

200

250

Q2 2013 Q2 2014




Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

100

200

300

400

500

600

700

800

Q2 2013 Q2 2014

Aggregate Venture Capital Entry Transaction Values



Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

18

DATA PACK


VC – EMEA GP’s

0

2

4

6

8

10

12

Q2 2013 Q2 2014


by Region (€mn) Q2 2013 vs. Q2 2014 BeNeLux

Eastern Europe

Middle East

Nordics

North Africa

Northern Europe

Southern Europe

Sub-Saharan Africa

Western Europe 0

5

10

15

20

25

30

35

40

Q2 2013 Q2 2014




Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

20

40

60

80

100

120

Q2 2013 Q2 2014


by Region Q2 2013 vs. Q2 2014 Asia/Pacific Developed Markets

BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe0

50

100

150

200

250

Q2 2013 Q2 2014

Number of Venture Capital Entry Transaction Values



Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

19

DATA PACK


0

50

100

150

200

250

300

350

400

Q2 2013 Q2 2014

Aggregate Venture Capital Entry Transaction Value

by Region (€mn) Q2 2013 vs. Q2 2014 Asia/Pacific Developed Markets

BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe

0

20

40

60

80

100

120

140

160

180

200

Q2 2013 Q2 2014




BeNeLux

Caribbean

Central America

Eastern Europe

Far East


Middle East

Nordics

North Africa

North America

Northern Europe

South America

South-East Asia

Southern Europe

Sub-Saharan Africa

Western Europe

0

100

200

300

400

500

600

Q2 2013 Q2 2014

Aggregate Venture Capital Entry Transaction Value



Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

0

20

40

60

80

100

120

140

Q2 2013 Q2 2014




Consumer Staples

Energy

Financials

Healthcare

Industrials


Materials


Utilities

20

DATA PACK


Multiples Table

Implied Enterprise

Value/EBITDA

EMEA Private Equity

Exits Q3 2013 - Q2

2014

M&A Q3 2013 -

Q2 2014

Consumer

Discretionary 15.5 13.5

Consumer Staples 10.1 11.6

Energy 7.7 7.4

Financials 9.6 15.3

Healthcare 20.6 21.2

Industrials 9.7 8.9

Information

Technology 12.9 10.7

Materials 7.0 9.2

Telecommunication

Services 7.5 8.6

Utilities 12.7 11.4

Implied Equity Value/LTM

Net Income

EMEA Private Equity

Exits Q3 2013 - Q2

2014

M&A Q3 2013 -

Q2 2014

Consumer Discretionary 46.7 22.1

Consumer Staples 24.6 31.9

Energy N/A 12.3

Financials 27.0 20.6

Healthcare 54.6 29.7

Industrials 23.1 22.1

Information Technology 34.1 28.1

Materials 13.8 29.1

Telecommunication

Services 21.2 14.5

Utilities 71.0 21.6

21

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