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Private equity deal activity proves resilient

Portrait of Sascha Haghani
Senior Partner, Managing Partner Germany
Frankfurt Office, Central Europe
+49 69 29924-6444
November 9, 2018

Engineered Products, IT/Telecommunications and Consumer Goods stay ahead of other industries

PE-related deal activity was strong in the third quarter of 2018, though somewhat down on the record year 2017. Nevertheless, political uncertainty and rising economic instability remain key concerns for the community, intensified by weaker capital markets and lowered forecasts for economic growth in Europe.

Diverse management team
Many of the 34 new deals targeted in September are still ongoing, indicating a positive outlook for the remainder of the year.

The first three quarters saw a continuously strong deal-flow with 376 deals, compared to 349 deals in the first three quarters of 2017. The third quarter performed slightly stronger, with 118 deals compared to 102 deals in the same period last year, resulting in a continued high level of PE activity in the German speaking region. In comparison to the first three quarters of 2017, when 157 PE-backed acquisitions were closed, the number of deals finalized in 2018 currently stands at 136. In the third quarter of 2018, 35 new deals were closed. Looking at industry verticals, the highest amount of deal activity has been reported in the sectors of Engineered Products and Consumer Goods, whereas the Transportation and Energy segments remain rather muted in terms of deal flow.

From a political perspective, uncertainty still shapes the private equity sector. The risk of escalation in the trade war between the US and China as well as additional tariffs on European products persist and could have negative implications for PE funds' portfolio companies. Furthermore, the outcome of the Brexit negotiations remains unclear and might hit the German automotive industry especially hard. The crisis of the Turkish economy and economic instability in Italy are further pain points that increase investors' concerns.

The Private Equity Newsletter offers an overview of deal flows and is published on a regular basis. The most important developments in private equity are considered in the context of relevant political events.

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Newsletter

Private Equity Newsletter | Edition 3/2018:

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In the first three quarters of 2018, 376 private equity deals were closed in the DACH region. Despite growing political and economic uncertainties, the outlook for the fourth quarter remains positive.

Published November 2018. Available in
Further reading
Principal
Munich Office, Central Europe
+49 89 9230 - 8325
Portrait of Marc Hesse
Principal
Munich Office, Central Europe
+49 89 9230 - 8340
Portrait of Christof Huth
Senior Partner
Munich Office, Central Europe
+49 89 9230-8291
Portrait of Sven Kleindienst
Senior Partner
Munich Office, Central Europe
+49 89 9230-8539
Portrait of Gerd Sievers
Senior Partner
Munich Office, Central Europe
+49 89 9230-8543
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