Spotlight: UK and Ireland
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Deal volumes across the UK and Ireland were solid rather than spectacular in Q2, according to our latest heatmap analysis.
the value of PE transactions surged to an all-time high in Q2
Our latest analysis of private equity (PE) transactions and acquisition multiples via the Clearwater International Multiples Heatmap shows that the UK and Ireland deals market looks to have stabilised. Q2 saw 57 UK deals in total, just one more than the figure seen for Q1, while there have been 225 deals in the last twelve months (LTM), stabilising from a peak of 315 deals in LTM Q3 2021.
Meanwhile, across Europe the value of PE backed transactions surged to an all-time high in Q2 despite tough macroeconomic conditions and geopolitical turbulence. Deep reserves of liquidity and fierce competition for high quality assets contributed to a quarterly deal total of €83.6bn.
TMT sector in the UK saw the highest number of deals in the quarter
Once again, the TMT sector in the UK saw the highest number of deals in the quarter, with 17, and over the LTM period, 61. This trend was mirrored across Europe where the sector provided both the most deals, 74, and the highest deal value. The sector also generated the largest deal of Q2 with the investment by Government of Singapore Investment Corp (GIC), Singapore’s sovereign wealth fund, in The Access Group, a UK-based business management software specialist.
However, across all sectors, the UK and Ireland saw a dramatic fall in the number of sub-€50m deals with just 69 completed in the LTM period, compared with 127 in LTM Q2 2021. This has been driven by a flight to scale and quality and increased focus on resilience by PE funds looking to deploy capital in an uncertain economic climate.
Multiples
In terms of value, it was also a record quarter for the UK (€28.3bn) with almost half of this value accounted for by the TMT sector (€13.2bn) which saw a record quarter for deal value. However, this was swayed heavily by the €10.8bn sale of The Access Group to GIC.
Business services
Of particular note during Q2 quarter was the strength of Europe’s business services sector. The first six months of 2022 saw 84 PE buyouts in the sector, the second-highest total on record. Meanwhile, aggregate deal value over the same period rocketed to €29.4bn.
UK and Ireland was Europe’s most prolific generator of business services buyouts in Q2
This is the highest H1 deal total for business services on record, and far ahead of the previous high of €20.3bn achieved in H1 2021. Against this background, the long-term deal multiple for business services climbed to a new high in Q2. Interestingly, the sector multiple has seen consistent quarter-on-quarter rises dating back to Q3 2019, a run unequalled by any other sector.
The UK and Ireland was Europe’s most prolific generator of business services buyouts in Q2, amassing 15 transactions with a total value of €5.6bn. This comes following a stellar Q1, which saw the UK and Ireland deal total soar to a record-breaking €10bn.
Read more about the Business Services sector in our interview with Partner and Head of Business Services, Rob Burden.
