North America Drives Global Private Equity-Backed Buyout Deal Activity in 2015 by Preqin

Large cap deals in the region push aggregate deal value to its highest point since the Global Financial Crisis.

Private equity-backed buyout deal activity saw continued growth in 2015, as 3,546 deals were recorded totaling $409bn. This represents an 18% increase on the $348bn of private equity-backed deals in 2014, and it is the sixth consecutive year in which global deal value has increased. These figures are expected to rise by a further 10-20% as more data becomes available.

PE-Backed Buyout Deal Activity

PE-Backed Buyout Deal Activity

Large cap deals in North America are the main source of this growth, with six of the 10 biggest deals in 2015 taking place in the region. Overall, North America saw $255bn of private equity-backed buyout deals take place, up 35% from the $189bn of deals recorded in 2014. Overall, deals worth $1bn or more accounted for 9% of the total number of deals globally and 70% of the aggregate deal value, up from 52% in 2014.

PE-Backed Buyout Deal Activity

Other Key Buyout Deal Market Facts:

  • Global Deal Flow: The number of private equity-backed deals was 3,546, down slightly from the 3,797 deals recorded in 2014. However, given that Preqin projects these figures to rise by 10-20% as new information becomes available, deal flow in 2015 looks set to be on a par with previous years.
  • Regional Deal Value: Aggregate buyout deal value in Europe was $90bn in 2015, down slightly from $95bn the previous year. Total deal value in Asia stayed level, with $45bn of deals recorded in 2015, compared with $46bn in the previous year.
  • Deal Types: Partly fueled by acquisitions such as EMC/Dell, add-on deals accounted for 39% of total buyout deal value in 2015, up from 19% in 2014. LBO deals also accounted for 39% of global deal value. Both deal types each also accounted for just fewer than 40% of the total number of deals recorded in 2015.
  • Dry Powder: Total levels of uncommitted capital available to buyout fund managers have continued to climb through 2015, and are approaching the record levels seen in 2008-2009. As of the end of 2015, total buyout dry powder stands at $461bn.
  • Largest Deals: The biggest private equity-backed buyout deal in history took place in 2015, with the acquisition of EMC by Dell for $67bn. Of the top 10 largest deals to take place in the year, six were in the US, two in Asia and one each in Europe, and Australasia.
  • Biggest Exits: The merger of Freescale Semiconductor and NXP Semiconductors is the largest exit of 2015, at $16.7bn. All of the top 10 biggest exits of the year were trade sales, mergers, or secondary sales to GPs.

PE-Backed Buyout Deal Activity

Comment:

“2015 has been a record year for global M&A, and this has been reflected within the private equity universe. The global buyout market recorded its sixth consecutive year of increases in aggregate deal value, with a surge in the number and value of large cap deals. North America drove this increase in activity as the overall buyout deal value there rose by over a third from 2014’s total, and the region saw the largest ever private equity-backed deal with the acquisition of EMC by Dell Inc.

PE-Backed Buyout Deal Activity

Dry powder has increased by $12bn over the course of 2015 however this represents a slow-down in the rate of dry powder growth over recent years. This is an encouraging sign as, despite concerns over valuations, managers have been able to find attractive investment opportunities and put investor capital to work.”

Christopher Elvin – Head of Private Equity Products, Preqin