Private equity has remained robust in the first quarter of 2019, with deal values in the first three months of 2019 showing a quarter-on-quarter rise of 3.6% to US $202.2bn.
On the flip side, buyout activity did drop marginally; however, take-private transactions conducted by private equity firms reached their highest Q1 value since 2013 – this was driven by the top two buyouts of the year so far – both made by US-based Hellman and Friedman. The private equity firm bought US software developer Ultimate Software Group for US $11.8bn (the fifth largest private equity buyout in the TMT sector on Mergermarket record), as well as making an offer of US $6.4bn for German real estate and automotive digital marketplace, Scout 24.
The exit market also saw an increase in value due to high-profile trade sales such as KKR’s US $38.4bn partial exit of First Data to Fiserv in the US or the acquisition of Singapore-based property developer Ascendas-Singbridge by CapitalLand from Temasek for USD $8.1bn. Overall, global exit activity reached USD $125.6bn in the first three months of 2019, making it the highest Q1 value on record.
Amid political and economic uncertainty, including Brexit and trade tensions between the US and China, it may be surprising to hear the private equity success story; however, as fundraising remains at unprecedented levels and, according to Preqin, private equity firms have accumulated more than US $2 trillion in dry powder, competition for attractive assets will intensify, driving valuations higher.
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