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Mike Wright, Imperial College © Imperial College Business School Latest Private Equity Trends 1 Equistone Partners Europe, Birmingham Breakfast Seminar,

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Presentation on theme: "Mike Wright, Imperial College © Imperial College Business School Latest Private Equity Trends 1 Equistone Partners Europe, Birmingham Breakfast Seminar,"— Presentation transcript:

1 Mike Wright, Imperial College © Imperial College Business School Latest Private Equity Trends 1 Equistone Partners Europe, Birmingham Breakfast Seminar, Feb 6, 2014

2 Trends –UK, Europe, Midlands –Values and numbers –Regional Differences –Vendor sources –Industrial sectors –Deal structures and Pricing –Fund raising –Exits Prospects Introduction © Imperial College Business School Latest Private Equity Trends 2

3 © Imperial College Business School 3 UK PE-backed Buyout Market Eases (£m)

4 © Imperial College Business School 4 Mid-market (PE-backed £50-250m)

5 UK Quarterly Trend Stays Flat

6 Major European Markets Rise

7 Midlands Quarterly Trends

8 © Imperial College Business School 8 PE-Backed Regional Deal Numbers (Head Office)

9 © Imperial College Business School 9 PE-Backed Regional Deal Value (Head Office)

10 All Midlands Deals Value Flat But Volume Down

11 Midlands Share of all UK MBO/MBIs

12 UK Top End Volume Recovery (over £100m)

13 Midlands Deals above £100m decline

14 Largest Midlands Deals Buyout NameVendorDeal Value (£m) Busy Bees Knowledge Universe Education (USA) 220 Aurum HoldingsLandsbanski175 Whitworths HoldingsSBO (European Capital)90 Kee Safety InternationalSBO (LDC)90 32.2 WM Wymeswold Solar Power Plant Private44 City LinkRentokil40 Acenta SteelEndless38 Meter ProvidaFusion group38 In 2012 there were 6 £70m plus Midlands Deals

15 Midlands – The Last Decade NumberValue East MidsWest MidsEast MidsWest Mids 2003 637016294007 2004 617717771057 2005 6457547982 2006 477015413723 2007 666813742526 2008 38501563811 2009 2737150248 2010 3322971853 2011 22392311345 2012 3029477385 20132625416486

16 © Imperial College Business School 16 All UK Vendor Source (Number %)

17 © Imperial College Business School 17 PE-backed SBOs (Number & Value £m)

18 © Imperial College Business School 18 SBO Value Exceeds Other Buyouts for first time (£m)

19 © Imperial College Business School 19 SBOs vs Other Buy-outs (Numbers)

20 Generally arise where primary buyout performance relatively weaker and held longer SBOs on average perform worse than primary buyouts, divisional & FF buyouts Positive effects of SBOs achieved by expansion not increased efficiency. BUT……SBOs between specialized PE firms do perform better Care with Secondary Buyouts? sustain performance?

21 UK & Midlands 2013 Vendor Sources – % by Numbers

22 UK & Midlands 2013 Vendor Sources – % by Value

23 © Imperial College Business School 23 UK Industry Sectors (Numbers)

24 © Imperial College Business School 24 Midlands Sectors Deal Numbers Sector20112012 2013 Bus. & Support Services 13125 Financial Services 310 Food and Drink 221 Healthcare 242 Leisure 565 Manufacturing 171914 Other 936 Paper,Print,Publish 020 Property & Construction 123 Retail 565 TMT 309 Transport & Comms 121 Total615951

25 © Imperial College Business School 25 Midlands Sectors Deal Values Sector20112012 2013 Bus. & Support Services 148198240 Financial Services 620 Food and Drink 31790 Healthcare 1272224 Leisure 109540 Manufacturing 399115128 Other 11242125 Paper,Print,Publish 01520 Property & Construction 3846 Retail 68512184 TMT 460 Transport & Comms 2540 Total1575862902

26 © Imperial College Business School 26 Debt Available (Deal Structures Above £10m)

27 Collateralised Loan Obligations issuance

28 COV-LITE The Return of Cov-Lite Loans

29 Entry EBIT Multiples for UK Buy-outs Increasing

30 © Imperial College Business School 30 UK Fund Raising back to peak levels

31 © Imperial College Business School 31 PE Backed Exit Recovery Continues

32 © Imperial College Business School 32 Mid-market exits accelerate (PE backed, £50-250m entry value)

33 © Imperial College Business School 33 Flotations resurrected

34 Exits of Midlands Deals

35 © Imperial College Business School 35 Main Midlands Exits Company NameDeal Year Exit Value (£m) Name of Buyer Whitworths Holdings200690Equistone Partners Kee Safety International201190Dunedin CP Napier Turbochargers200875Wabtec Corp (USA) Bionostics (Nav Bidco)200868Techne Corp (USA) Optimum Care200738Four Seasons Acenta Steel201138MBO Practice Plan200538Wesleyan Assurance Society Lil-lets UK200637Premier Foods (South Africa) Eve Trakway200628Ashtead Group

36 Private Equity Prospects Large deal volume up though total value down – Absence of mega deals Significant pending deals in 2014 – Domestic & General at £750 million – Skrill £511 million More large deals expected

37 Private Equity Prospects Public to privates extremely quiet in 2013 No large pending PTP deals Buoyant stock market Very quiet year for PTP in 2014

38 Private Equity Prospects IPO value of £9.8 billion highest on record. If stock and capital markets remain positive this trend should continue through 2014. Trade sales increasing but still seems some caution by corporates in converting increasing confidence into action

39 Private Equity Prospects 2013 ended on a more positive note than it began. Debt levels rose last year and more relaxed debt markets Buoyant exit and refinancing markets Increased UK based fund raising Large amounts of capital availability likely to fuel return to growth in buyout market in 2014.


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