GCA Altium
GCA Altium MidCapMonitor: Record number of finance transactions in the German LBO market
DGAP-News: GCA Altium / Key word(s): Final Results/Market Report Sharp rise in proportion of new finance deals.
Munich, Frankfurt, Zurich, 13 January 2017. 2016 was a new post-Lehman record year for the German mid-cap LBO market. The latest MidCapMonitor survey by global investment bank GCA Altium lists 77 transactions for 2016, representing a further 10% rise on the prior year. The survey regularly analyses leveraged buyout finance transactions with a credit volume of between EUR 20 and 500 million. The proportion of new finance transactions, i.e. primary LBO deals, was 55% in 2016, up significantly on the 43% seen in 2015. While recaps and refinancings accounted for 48% of transactions in the first half of 2016, they fell to just 35% for the whole year. At 10% of transactions, add-on financing, i.e. the acquisition of additional parts of a business, was slightly below the previous year (13%) on a full-year basis. Overall, private equity firms thus chose more frequently to sell a portfolio company, especially in the second half of 2016, and opted less often to pay a dividend. “Although payment of a dividend is very attractive, at some stage private equity funds also need to realise sales proceeds. This came much more strongly to the fore in the second half of 2016 than in the prior periods,” said Norbert Schmitz, Managing Director of the Frankfurt office of GCA Altium. 2016 also saw an increasing number of acquisitions by strategic investors, such as GE buying Concept Laser, Tesla buying Grohmann, RCP Group buying ESE, the Signa Group buying Internetstores and Liaoning Dare Industrial buying Carcoustics. On the banking side, SEB and its relatively small team handled 20 transactions last year (previous year: 6 transactions), replacing Commerzbank as market leader. Second place was taken by Commerzbank (15 transactions), with DZ Bank and Unicredit in joint third spot (with 12 transactions each). During the last quarter of 2016, banks provided new LBO finance for companies such as ZytoService, Drahtzug Stein, think project!, Schock, SLV, Utimaco, GEV, Cherry, Onlineprinters and Aposan. Recaps and refinancings were conducted at Koller, ATOS Kliniken, HSE24 and Puraglobe, among others. As forecast by GCA Altium at the end of 2015, the share of the German LBO market accounted for by debt funds declined, falling from 26% in the full year 2015 to just 18% in 2016. Analysis by GCA Altium indicates that this is mainly due to the banks continuing to adapt their structures in response to competition from debt funds. In addition to a reduction in the cost of bank finance, which fell in the second half of 2016 in particular, banks now offer considerably more flexibility around “softer” factors such as covenants and other credit terms in loan agreements. This significantly erodes one of the key advantages enjoyed by debt funds. “In the second half of 2016, debt funds were nevertheless able to stabilise their market share and actually increase it again slightly,” commented Johannes Schmittat, Managing Director at the Frankfurt office of GCA Altium. Debt funds accounted for 15% of the market in the first half of the year, and 18% over the whole year. Unlike Germany, which posted a fall from 16 (2015) to 12 (2016) transactions, the wider European market for unitranche finance provided by debt funds continued to grow significantly, with 102 transactions (2016) compared to 92 transactions in the previous year. However, growth is slowing somewhat (2014: 63 transactions). The biggest market for debt funds remains the UK, with 41 transactions in 2016, followed by France with 25 transactions. About GCA Altium GCA Altium is the European division of GCA. The global investment bank offers growth companies a broad portfolio of services around M&A, debt, public and private finance as well as advice on restructuring matters. GCA is listed on the Tokyo stock exchange (TSE: 2174) and has extensive expertise in technology and telecommunications, media, digital media and communications, consumer and retail, healthcare, industrial technologies, financial markets and business services. GCA has expert teams in Frankfurt, London, Manchester, Milan, Mumbai, Munich, New York, Osaka, San Francisco, Shanghai, Singapore, Tel Aviv, Tokyo and Zurich. GCA Altium regularly compiles the GCA Altium MidCapMonitor overview of leveraged transactions in Germany to boost the transparency of the German mid-cap LBO market. Further information: http://www.gcaaltium.com For more information: IRA WÜLFING KOMMUNIKATION GmbH
13.01.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |