European PE
Breakdown
2017
2Q
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Credits & Contact
PitchBook Data, Inc.
JOHN GABBERT Founder, CEO
ADLEY BOWDEN Vice President,
Market Development & Analysis
Content
NICO CORDEIRO Analyst
DYLAN E. COX Analyst
KORY HOANG Data Analyst
JENNIFER SAM Senior Graphic Designer

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Introduction
4
Overview
5-6
US-based Investor Activity
7
Deals by Sector & Size
8
Exits
9
Fundraising
10
League Tables
11
Methodology
12
Contents
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and is not to be relied upon as such or used in
substitution for the exercise of independent
judgment.
3
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
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The PitchBook Platform
The data in this report comes from the PitchBook Platformour data
software for VC, PE and M&A. Contact sales@pitchbook.com to
request a free trial.
The future of European PE
looks promising
Introduction
NICO CORDEIRO
Analyst
Key takeaways
Deal volume is down, but deal value is off to a strong start with an estimated 201.8 billion of capital
invested over 1,209 deals in 1H 2017. As the political uncertainty in Europe subsides, we expect this
strong deal flow to continue throughout the rest of the year, as PE firms put 195.1 billion in dry powder
to work.
Exits via corporate acquisitions continue their downward trend, on pace for a 33% year-over-year
decrease in both value and volume. Weaker corporate activity has reduced exit opportunities, but on
the flip-side has eased pricing pressures, which resulted in median EV/EBITDA multiples dropping from
9.2x in 2016 to 8.3x through the first half of this year.
So far, the fear of negative economic consequences resulting from Brexit has done little to deter PE
investors. Through the first half of the year, 36% of all capital invested in Europe by PE shops was
placed in UK-based companies with 60.3 billion invested over 410 deals.
European PE firms raised 41.6 billion in commitments over 54 funds through the first half of the year.
At the current pace, the European PE industry will raise the most amount of capital in our dataset since
2007.
In many ways, European PE activity mirrors the PE landscape in the United States. Deal and exit volumes
are on a downward trend and looking at 20% or greater year-over-year decreases if the current pace
continues. Despite the slowdown in the rate of investing, fundraising continues to boom, with European
PE on pace to surpass the amount of capital raised in 2007the highest amount of capital raised in
our dataset. It will be interesting to see how the rest of the year plays out now that significant political
uncertainty appears to be in the rear-view mirror for the time being.
Beginning this quarter, we've included estimates on top of the usual deal flow data that our readers are
accustomed to. Due to the nature of private market data, information often does not become available until
well after a transaction takes place, so shifts tend to occur over time. With these new estimates, we aim
to provide an even more accurate picture of the private markets. Please see the methodology page of this
report for more details.
We hope this report is useful in your practice. As always, feel free to send any questions or comments to
reports@pitchbook.com.
4
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Sourcing for better value
Overview
European PE activity
Median PE deal size ($M)
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Deal value remains strong
201.8 billion (estimated) of
capital was invested over 1,209
(estimated) deals throughout
Europe during the first half of the
year. If the current pace continues,
we will see a 23% decrease in
the number of deals, but the
amount of capital invested will
be nearly even with 2016. Given
fewer deals but greater capital
flows, it is unsurprising that the
median deal size trended upward
to 29.3 million, the highest
median in our dataset since 2007.
B2B companies continue to be
the sector of choice for PE firms,
accounting for 36% of all deals
completed this year. However,
IT continues to see increased
activity, accounting for 21% of
deals completed. That proportion
is well above the 10-year average
of 13% of deals annually. We are
witnessing a similar trend globally
as PE firms, faced with high
valuations and stiff competition,
search for companies with higher
margins and greater growth
potential.
Multiples fall
Despite greater deal sizes, median
valuation/EBITDA multiples fell to
8.3x on deals completed through
the first half of the year, which
is the lowest median valuation/
EBITDA multiple since 2013. This
is nearly a full 1x cheaper than in
2016. We believe a steep decline
in strategic acquisitions helped
ease pricing pressures for PE
acquisitions through the first two
quarters. PE deal flow is expected
to strengthen through the rest of
the year for four reasons.
227100201234225247358476370183201.8 est.
2,400
1,617
2,275
2,611
2,451
2,552
3,005
3,344
3,132
1,209
2008
2009
2010
2011
2012
2013
2014
2015
2016 2017*
Deal Value (B)
Es mated Deal Value ($B)
# of Deals Closed
Es mated # of Deals Closed
$25
$29.3
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
5
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Sourcing for better value
Overview, continued
Median European PE buyout multiples
UK PE activity
Source: PitchBook. *As of 6/30/2017. Note: The sample size for debt percentages was insufficiently
robust on a normative basis, hence the asterisk.
5.0x2.7x3.9x4.3x4.1x4.4x5.4x5.1x5.2x4.7x*4.3x2.6x4.2x4.3x4.1x3.5x4.0x4.0x4.1x3.6x9.3x
5.3x
8.1x
8.6x
8.3x
7.9x
9.4x
9.0x
9.2x
8.3x
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
Debt/EBITDA
Equity/EBITDA
Valua on/EBITDA
512350505058851088952617
405
623
674 674
794
916
1,024
930
410
2008
2009
2010
2011
2012
2013
2014
2015
2016 2017*
Deal Value (B)
Deal Count
Source: PitchBook. *As of 6/30/2017
One, the political uncertainty
surrounding the European Union
during 2016 continues to fade.
Second, valuation multiples have
decreased. Third, European PE
firms hold 195.1 billion in dry
powder as of the end of 2016.
Lastly, loose credit policies
have provided steady leverage
opportunities, evidenced by the
fact median debt levels remain
unchanged with a roughly 56%
debt-to-equity ratio since 2010.
What Brexit?
The UK region saw 51.8 billion
in total value over 410 deals,
signifying positive change in
terms of PE activity since the
vote to exit the EU. This equates
to 36% of all deals completed in
Europe so far this year and is well
above the long-term average of
28%. Without a change in that
current trend, UK companies are
on pace to receive the greatest
percentage of PE deal flow in
our dataset. PE investors remain
optimistic about the UK economy
despite the continuing narrative
suggesting negative economic
consequences as withdrawal from
the EU moves forward.
6
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
US-based investor activity w/o European investor
participation
European PE activity with US-based investor
participation
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
US PEGs ramping up
US-based Investor Activity
7027556171691131528855424
268
358
459
446
451
610
657
584
224
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value (B)
# of Deals Closed
22112934323465685137187
116
185
237
220
238
322
341
294
128
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value (B)
# of Deals Closed
US firms look abroad
20% of deals completed in Europe
during the first half of the year
included some form of capital
from US investors, totaling 224
deals and 55 billion in deal
value. This is up about 2% from
the historical average of 18%, but
the most interesting aspect of
this data point is that a full 11% of
deals completed in Europe were
completed without a European
counterpart. Deals without any
European PE firm's participation
accounted for 37.2 billion in deal
value over 128 deals. This is partly
driven by US investors looking for
cheaper markets and partly driven
by a tightening of the dollar-euro
exchange rate since 2014. Activity
along this front will require the
currency pair to stay closer
to parity for US firms to fully
capitalize on cheaper markets in
the EU. However, as US PE firms
complete an increasing number
of acquisitions in Europe and
become more familiar with the
legal and regulatory complexity
of operating within the EU, those
barriers to entry are eroded. Due
to this, and barring any major
changes in the exchange rate, we
expect US investor-only activity
to increase in volume moving
forward.
What does this mean for
European investors?
Historically, European PE
investors have benefited
from club deals involving US
investors by providing regulatory
and regional expertise for
inexperienced US investors
in exchange for the ability to
spread equity contributions
among multiple investors. As
US investors continue venturing
off on their own in increasing
numbers, valuation multiples
could increase in Europe as ever-
intensifying foreign competition
drives prices higher. This is
another reason why we expect
European deal flow to finish out
the second half of the year strong.
7
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
IT deal value grows significantly
European PE deals (B) by sector
B2B drives transaction count
European PE deals (#) by sector
Deals of 500M+ account for over 50% of 2017 value
European PE deals (B) by size
Smaller deals still make up most transaction volume
European PE deals (#) by size
IT remains in focus
Deals by Sector & Size
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Unknown deal values are estimated based on known figures.
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008200920102011201220132014201520162017*2.5B+
1B-2.5B
500M-1B
100M-500M
25M-100M
Under 25M
0
100
200
300
400
500
600
2008200920102011201220132014201520162017*2.5B+
1B-2.5B
500M-1B
100M-500M
25M-100M
Under 25M
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008200920102011201220132014201520162017*B2B
B2C
Energy
Financial Services
Healthcare
IT
Materials & Resources
0
100
200
300
400
500
600
2008200920102011201220132014201520162017*B2B
B2C
Energy
Financial Services
Healthcare
IT
Materials & Resources
8
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Exits continue to slide
Exits
Tending to be off pace
European PE-backed exits
SBOs on the rise
European PE-backed exits (B) by type
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
Difficulties in selling ahead?
In the first half of the year, exits
continued a downward trend that
began in 2015 with 76.7 billion
in exit value over 471 deals. This
is on pace to see a 22% decrease
in volume and 17% decrease in
value. Despite cooling, exits
are still strong on a historical
basis. We don't expect exit
volume to fall much further as
32% of all European companies
sponsored by PE firms were
acquired over five years ago. For
years, distributions from general
partners to limited partners far
outpaced contributions. However,
that trend is reversing as exits
slow and LPs continue to commit
record amount of capital to PE
firms. If exits continue trending
downward and older inventory
continues building, it will be
more difficult to unload inventory
should a large percentage of PE
firms seek liquidity within a short
timeframe.
Corporate buyers retreat
The biggest driver causing
exits to fall is the retreat by
corporate acquirers, which is
surprising given the continued
strength of corporate earnings
throughout major European
markets. Corporate acquisitions
accounted for 41.6 billion in exit
value across 206 exits, which
represents 54% of all deal value
but only 44% of deals by count.
This is on pace for a 33% decrease
in both exit value and number.
Secondary buyouts are on pace
to decline 7% in volume, now
making up 52% of all exits with
31 billion in exit value over 245
deals. As the percent of company
9426611188019217920418677701
509
716
933
835
1,053
1,127
1,341
1,200
471
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Exit Value (B)
# of Exits
0
50
100
150
200
250
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Corporate Acquisi on
IPO
Secondary Buyout
inventory held greater than five
years increases, sponsor-to-
sponsor sales are becoming a
more prominent exit option as PE
firms begin looking for liquidity in
current investments.
9
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
On pace for decade high
Fundraising
Decade high in funds hitting their targets
European PE funds (#) hitting target
Median European PE fund size (M)
2017 pacing to surpass last year's fund count, just barely
European PE fundraising
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
Source: PitchBook. *As of 6/30/2017
Commitments still pour in
PE fundraising worldwide
continues to boomEurope is no
different with 41.6 billion raised
this year across 54 funds. This is
not only on pace to surpass 2016
fundraising numbers by 16%, but
also looking to exceed the total
raised in 2007. On top of those
strong numbers, 88% of funds
hit their target, up from last year
and the highest percentage in our
dataset.
Median fund sizes are down
After reaching the highest mark
in our dataset, median fund
sizes are down 27% through 1H.
This is mostly due to a smaller
number of 1 billion+ funds
closed when compared to 1H
2016. The only mega-fund to
close in Europe in 2Q was the
massive $16 billion buyout fund
raised by CVC Capital Partners.
This is vastly different than the
fundraising scene in the US,
where median fund sizes are up
to record levels this year and
mega-funds continue to dominate
the landscape. LP contributions
to PE will continue to increase
throughout the rest of the year.
However, distributions have been
on a downward trend. If exits
continue to slow, contributions
will surpass distributions for the
first time since 2010. Should this
occur, the fundraising craze of the
last few years will finally begin
slowing.
797850412338316147537242191
188
156
113 105 112
99
109
97
88
94
54
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Capital Raised (B)
# of Funds Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Hit Target
Missed Target
225.0
249.0
0
50
100
150
200
250
300
350
400
450
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Buyout Funds
All PE Funds
400.0
342.6
10
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
SPONSORED BY
Firm name
Date
Size (M)
Investor(s)
HQ
Sector
Alight Solutions
1/5/2017
$4,800
The Blackstone Group
London
BPO/Outsource
Services
OT Morpho
31/5/2017
2,420
Advent International
Paris
Systems & Information
Management
Xella International
11/4/2017
2,200
Lone Star Funds
Duisburg
Building Products
Mauser Group
3/4/2017
$2,300
Stone Canyon Industries
Brhl
Packaging
Cerba HealthCare
20/4/2017
2,000
Partners Group, Public Sector Pension
Investment Board
Cergy-Pontoise
Laboratory Services
Firm name
Date
Size (M)
Type
Former Investor(s)
HQ
Sector
Host Europe
3/4/2017
$1,820
M&A
Cinven, Oakley Capital Private
Equity
Cologne
Internet Service
Providers
Zabka Polska
21/4/2017
$1,580
Secondary
Buyout
CVC Capital Partners
Poznn
Department Stores
Vanderlande
Industries
18/5/2017
1,200
M&A
NPM Capital
Veghel
Logistics
Beacon Rail Leasing
9/4/2017
855
Secondary
Buyout
Pamplona Capital Management
London
Rail
Antarius
1/4/2017
425
M&A
Aviva
Paris
Life & Health
Insurance
Fund name
Firm
Close date
Size (M) HQ
CVC European Equity Partners VII
CVC Capital Partnesr
1/6/2017
16,000
London
Vitruvian Investment Partnership III
Vitruvian Partners
29/6/2017
2,400
London
Chequers Capital XVII
Chequers Capital
17/5/2017
1,100
Paris
Adelis Equity Partners Fund II
Adelis Equity Partners
9/6/2017
600
Stockholm
MCH Iberian Capital IV
MCH Private Equity
5/4/2017
300
Madrid
Select largest PE-backed exits in 2Q 2017
Select largest PE buyouts in 2Q 2017
Select largest closed PE funds in 2Q 2017
Source: PitchBook
Source: PitchBook
Source: PitchBook
League tables
2Q 2017
11
PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
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Methodology
Deals
PitchBook only tracks closed
transactions, not rumored or
announced deals. All unknown
deal values are extrapolated from
known transaction values. The
eligible PitchBook transaction types
are all buyout types, PE growth
investments and investor buyouts by
management.
Deal Flow Estimation
Due to the nature of private market
data, information often does not
become available until well after a
transaction takes place. To provide
the most accurate data possible,
we estimate how much of this new
information will become available in
the next quarter by calculating the
average percentage change in deal
flow from the first to the second
reporting cycle over the trailing 24
months. We then add this estimate
to the reported figure for the most
recent quarter. Both the original
reported figure and the estimated
figure are provided for your
reference.
Exits
PitchBook only tracks completed
exits, not rumored or announced.
Exit value is not extrapolated. Initial
public offering (IPO) size is based
on the initial price that the company
sets multiplied by the number of total
shares outstanding.
Fundraising
Unless otherwise noted, PE fund
data includes buyout, co-investment,
diversified PE, energy alternative/
renewables, energy oil & gas,
mezzanine, mezzanine captive,
growth and restructuring/turnaround
funds. Fund location is determined by
specific location tagged to the fund
entity, not the investor headquarters.
Only closed funds are tracked.
Geographical Scope
Only transactions involving
companies headquartered in Europe
are included.
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PITCHBOOK 2Q 2017 EUROPEAN PE BREAKDOWN
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