2019年欧洲私募股权展望英文版_40页_1mb

European Private Equity Outlook 2019 Summary

Core Content

The European Private Equity Outlook 2019 is the 10th consecutive publication by Roland Berger, based on a survey of over 2,500 private equity professionals across Europe. The report outlines the expectations and trends for the private equity market in 2019, focusing on M&A transactions, industry dynamics, valuation trends, and the evolution of the private equity business model.

Main Points

1. M&A Transaction Outlook

• Decreased optimism: PE professionals are less optimistic about the number of M&A transactions with PE involvement in 2019 compared to 2018. 48% expect a decrease, while 31% expect an increase.
• Geographic variations: Positive growth expectations are seen in Spain, Portugal, Scandinavia, and Central and Eastern Europe (CEE). The UK and Italy show the lowest growth expectations due to Brexit uncertainty and political instability.
• Transaction size: Mid/small-cap deals are expected to drive growth, while large-cap transactions may see a slight decline.

2. Industry Trends

• Top industries: Pharma & healthcare, Technology, Media & Telecommunications (TMT), and Business Services & Logistics are expected to be the most active in terms of M&A transactions with PE involvement.
• Consumer goods & retail: Also expected to be a major contributor to M&A activity.
• Building & construction: Expected to see a significant decline in PE transactions, down 11 percentage points from 2018.

3. Valuation Multiples

• Overvaluation concerns: 91% of PE professionals believe current valuation multiples are (slightly) overvalued, up from 93% in 2018.
• Expected decrease: 63% of respondents expect valuation multiples to (slightly) decrease in 2019, reflecting a shift in market sentiment.

4. Exit Channels

• IPO skepticism: IPOs as an exit channel are increasingly viewed with skepticism, with a decline in importance expected.
• Strategic and PE sales: Sales to strategic and PE investors are seen as the most promising exit channels.
• Dual and triple tracks: These exit strategies are also expected to decline in significance.

5. Fundraising and Competition

• Stable competition: Most PE professionals (50%) expect no change in the level of competition for fundraising in 2019, with 43% anticipating a more intense competition.
• Refinancing and recapitalization: These are expected to become slightly more difficult to raise, while growth financing remains relatively stable.

6. Process Uncertainty

• Persistent challenge: Over half (54%) of respondents expect process uncertainty to remain a key challenge in 2019, up from 39% in 2018.
• Impact on deal flow: Uncertainty may lead to delays and more bidders in the M&A process.

7. Business Model Evolution

• Active portfolio management: Expected to gain importance, with 43% of respondents anticipating this change.
• Portfolio resilience: Increased focus on making portfolio companies more resilient to economic changes ("weatherproof" portfolio).
• Geographical expansion: Expansion into new geographies is seen as a key development.
• Minority investments: Less important than in previous years, with a drop of 4 percentage points.

8. Value Creation Measures

• Add-on acquisitions: Remain a top value creation strategy.
• Digitalization/Industry 4.0: Expected to play a key role in value creation.
• Cycle resilience: Gains in importance, with a 10 percentage point increase compared to 2018.
• Pricing and supply chain optimization: Considered less important in 2019.

9. Consultant Involvement

• High involvement: External consultants are most involved during the acquisition and pre-exit phases.
• Lower involvement: During the early post-acquisition and portfolio holding periods.
• No significant change: Consultant involvement trends are largely consistent with previous years.

Key Information

• Survey scope: Over 2,500 private equity professionals from leading firms in Europe.
• Valuation trends: Overvaluation concerns are widespread, with 91% of professionals reporting this.
• Market stability: Despite a less optimistic outlook, the availability of attractive targets is expected to remain stable.
• Exit channel shift: The IPO channel is losing importance, while sales to strategic and PE investors are seen as more viable.
• Industry focus: Pharma & healthcare, TMT, and business services & logistics remain top sectors for M&A activity.
• Transaction size: Mid/small-cap deals are seen as the most promising in 2019.

Summary of Changes from Previous Years

• PE market growth: After a strong 2017-2018, the market is expected to see a slight decline in 2019.
• Industry rankings: The top three industries for M&A activity remain consistent over the past three years.
• Target attractiveness: Remains broadly stable, with no significant change in the availability of attractive targets.
• Valuation trends: Overvaluation is a growing concern, with a shift in expectations for a decrease in multiples.
• Consultant involvement: No significant change in the involvement of external consultants across the lifecycle of PE portfolio companies.
• Business model: More active portfolio management and cycle resilience are becoming central to the PE business model.