Private equity groups have demonstrated a remarkable surge in European acquisitions throughout 2024, capitalising on the continent’s economic challenges to acquire large companies at attractive valuations. The total value of European buyout deals exceeding $1bn reached $133bn, marking a significant 78 per cent increase compared to the previous year, substantially outpacing the global growth rate of 29 per cent.
Major transactions highlighted this trend, including a substantial $6.9bn consortium agreement for investment platform Hargreaves Lansdown and a notable $5.5bn acquisition of cyber security specialist Darktrace by Thoma Bravo in the UK. The French renewable energy sector also saw significant activity, with Brookfield and partners securing a $3.8bn stake in Neoen.
Economic uncertainties, coupled with a robust US dollar, have prompted American private equity funds to strategically target specific European regions. Neil Barlow, partner at Clifford Chance, identifies the UK, Nordic countries, and Germany as primary destinations for private capital investment, citing their relative economic stability.
European stock exchanges, particularly the London Stock Exchange, continue to face challenges as companies either migrate to US listings or transition to private ownership through buyout arrangements. The value of European take-private deals involving majority stakes above $1bn experienced a 44 per cent increase to $52bn in 2024, encompassing 15 distinct transactions.
The disparity between European and US equity valuations has reached historic levels, with the Stoxx Europe 600 trading at an unprecedented discount compared to the S&P 500. This valuation gap has created unique opportunities for private equity firms, despite smaller deals showing slower growth in Europe compared to other global regions.
Industry experts remain optimistic about the European market’s potential. Alexis Maskell of BC Partners emphasises the region’s ability to offer market-leading companies at attractive valuations, particularly when compared to their US counterparts, highlighting the continued appeal of European assets to private equity investors.
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