Q3 2018 summary

This report identifies key themes driving European Private Equity (PE) deals’ EV/EBITDA multiples on a quarterly basis. The objective is to assist private equity investors in understanding drivers behind value trends across regions and sectors, leading to good investment opportunities.

The average valuation for PE platform investments remained stable across Europe in Q3 2018.

Despite seeing a 7% fall in multiples in Q3 2018, the Nordic region remained the hottest and was joined by the DACH region which has experienced multiple inflation through 2018 - notably in the TMT sector, reaching its highest level since our analysis started.

The CEE and Southern regions represent best value opportunities with multiples falling by 12% and 9% respectively in Q3 2018.

The Benelux region saw multiples in line with Q2 2018 while valuations in the France and UK/Eire regions continued to see steady inflation, increasing by 7% and 3% respectively in the quarter.

Greatest volatility multiples were seen in the CEE and DACH regions.

The TMT sector continues to be the hottest in Europe, despite seeing multiples cool by 8% in the last quarter and also seeing the highest volatility.

The industrials & chemicals and consumer sectors have both seen material price rises, the former seeing an increase of 14% through 2018 and the latter experiencing a 12% rise in the last quarter.

The healthcare and food & beverage sectors saw the largest decline in multiples at 10% and 24% respectively.

The business services and financial services sectors both showed small price rises of c. 5%.

The best value continued to be seen in the €50-250m deal range, with the lower end experiencing 7% inflation and the higher end seeing a 9% fall in multiples.

Mega deals continued to be the hottest with valuation of deals of €500m+ inflating by 10%.

Multiples on sub-€50m transactions remained in line with Q2 2018.

In this quarter, the Multiples Heatmap unpicks trends in the DACH region and the consumer and industrials & chemicals sectors.

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