AI: Take Private Transactions Achieving Record Deal Volume, Deal Size and Valuations

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.