Spotlight on: UK and Ireland
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Our latest data on private equity (PE) activity across the UK and Ireland shows that deal volumes have continued to trend upwards with almost twice as many transactions completed in Q3 this year compared to the same period in 2020.
over the last 12 months (LTM) average UK multiples have increased to 13.5x (compared to 13.2x in Q2 2021)
In total, 70 deals were completed in Q3 2021 against 36 deals in the same quarter in 2020, while over the last 12 months (LTM) average UK multiples have also increased to 13.5x (compared to 13.2x in Q2 2021), the seventh consecutive quarter of multiple increases and a new high for the region.
The UK and Ireland also saw the number of deals with a multiple of 15x or more surge to a record high, while LTM multiples for the largest deals (more than £1bn) showed the largest increase, climbing to 16.6x (up from 13.6x in Q2 on an LTM basis). Although total deal value has fallen from £19.3bn in Q2 this year to £13.2bn in Q3, this is still significantly above the Q3 2020 value of £4.9bn.
These strong figures for the UK and Ireland mirror wider trends in our latest analysis of PE activity across Europe, where PE activity neared record highs in Q3. Indeed 2021 is set to break all previous records for both volume and value.
TMT was the most active sector with 21 deals, followed by consumer with 11
Sector strength
In Q3 2021 the UK and Ireland saw a strong increase in the consumer sector (LTM multiple of 13.5x, up by 1.2x on the last quarter) and in financial services (LTM multiple of 10.7x, up by 1.2x on the last quarter), while the healthcare sector recorded the highest LTM multiple (14.9x). TMT was the most active sector with 21 deals in Q3, followed by the consumer sector with 11 transactions.
Our consumer and TMT sector teams’ activity echoes the Multiples Heatmap data having recently advised LDC on its investment in REAL Digital International, a specialised data-led software solutions and automated fulfilment provider. The team also provided debt advisory support on the deal. The business optimises client supply chains through its use of automation technology, software, personalisation and managing bespoke uniquely coded products to create more efficient production processes and reduce costs.
In the consumer space Clearwater International also advised Palatine Private Equity on the sale of its stake in Verdant Leisure, an award-winning holiday park operator, to the management team backed by Pears Partnership Capital.
Verdant Leisure is a bespoke holiday park operator offering lodge and caravan holidays and holiday home ownership at sites across Scotland and Northern England. The sale sees Palatine exit the business with a returns multiple of 3.7x, following a highly successful strategy of acquisitions and value creation which has grown Verdant’s annual turnover by 150% since 2016.
Marcus Archer, Managing Partner, Clearwater International said:
“Throughout 2021 multiples have reached record highs across several sectors – sectors which Clearwater International itself has seen a considerable uptick in activity. The UK remains a top performer and stands out as one of Europe’s consistently hottest regions for valuations. With activity not looking to slow down any time soon, we can expect to see the region to continue to peak investor interest, particularly from US sponsors.”
