Actionable Ideas for Companies and Sponsors
Take Private Transactions Achieving Record Deal Volume, Deal Size and Valuations
With private equity acquisition dry powder exceeding $2.0 trillion, combined with benign financing conditions and an intense competition for quality assets, private equity firms are increasingly looking to the public markets, where valuation multiples, inclusive of a takeover premium, are often lower than private market multiples. Already in 2019, a record $96 billion of take-privates have been announced, only 5% lower than total deal value for all of 2018. In addition, as fund sizes have increased, take-privates provide a means for private equity firms to deploy substantial capital as compared to private company buyouts. As a result, the 2019 YTD median take-private buyout has been more than five times larger than the median non-take-private buyout. Furthermore, take-private valuations are at record levels, with a median EV/EBITDA multiple of 14.1x for 2019 YTD.
The pool of potential take-private targets remains robust. Based on take-private screens performed by Jefferies, we estimate there are over 500 take-private candidates in the U.S. and Canada and over 300 in Europe, each with enterprise values greater than $500 million.