Private equity deal volume in Europe increased to its highest level in four years during 2017, with average EBITDA multiples increasing to 10.4xin 2017 vs. 10.2xin 2016
TMT saw the highest average prices paid in 2017 at 10.9x, slightly down on 2016 (11.1x). TMT PE deal volumes continue to represent a significant proportion of deal volume, 18% in 2017, replacing Consumer as second most active sector.
Financial Services was second hottest sector during 2017 with average multiples of 10.7x, jointly with Healthcare, but experienced steady price deflation through the year from 11.9xin Q1 2017 to only 9.4xin Q4 2017.
Industrials and Chemicals saw the highest volume of deals in 2017 (26%), with sub €50m EV deals increasing by 50%, and was the only sector in Europe to see multiples increasing between Q2 2017 and Q4 2017.
The Nordic region continues to be the hottest region with an average 2017 multiple of 11.0x, despite Q4 2017 multiple for the region dropping to 10.4xfrom a peak of 11.8xin Q2 2017.
Excluding outliers, best value opportunities in 2017 were in the Automotive and Real Estate sectors, where average prices were 9.0xand 8.5xrespectively.
The €1bn+ deal range group valuation was the hottest in 2017 at 12.4x, with best value being seen in the €50m to €100m range both during 2017 (9.8x) and in Q4 2017 (9.3x).