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North American PE Buyout Deal Activity Accelerates in Q2 2017

July 11, 2017, 07:38 AM
Filed Under: Economic Commentary

The private equity-backed buyout deals market saw some signs of recovery in the second quarter of 2017, as 1,001 deals were announced worth an aggregate $83 billion, according to Preqin

The research firm expects these figures to rise by around 5% as more information becomes available, putting the quarter comfortably ahead of the $55 billion recorded for deals announced in the first quarter.

However, activity in 2017 so far remains behind the levels seen through much of last year: Q2 2016 saw a much sharper recovery, recording 1,113 deals worth a total of $100 billion. Activity in Q2 2017 was driven by dealmaking in North America and Asia, as Europe saw deal values fall to their lowest level since Q1 2016.

North America saw 537 deals worth $55 billion, up from $25 billion seen in Q1. The largest deal announced in Q2 was the $6.9 billion acquisition of Staples, Inc. by Sycamore Partners.
Industrial deals accounted for the largest proportion of deal volume (22%), while healthcare deals represented 27% of total deal value, the greatest share. North America saw $36 billion in exits from buyout-backed companies

“The first quarter of 2017 saw a sharp slowdown in overall deal activity from private equity buyout funds. While Q2 has seen some momentum regained for the industry, it has not matched the sharp recovery seen in Q2 2016, which was the highest quarter of that year," said Christopher Elvin, Head of Private Equity Products. "Total deal value has exceeded Q1, but does not approach the level of activity seen in Q2 of last year."

"The acceleration in dealmaking through the quarter seems to be due to higher activity in North America, which saw almost twice as much capital deployed as in Q1," Elvin added.

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