Secondary buyout activity seems to be declining somewhat thus far in 2014, with only 230 to date, according to the PitchBook Platform. 2013, in comparison, saw a total of 486, and 2012 logged the current record of 514. However, when breaking down deal activity by size, one can see a potential cause for the decline so far: over the past few years, $1 billion+ SBOs have increased considerably, illustrating how deal multiple increases may be depressing activity in all but the loftiest ranges. For example, compared to the 30 $1 billion+ SBOs in 2010 and 2011 combined, the next two years saw 63 altogether, even as deal-making as a whole dropped. The trend of fewer but bigger SBOs doesn’t appear to be changing this year either, with 18 billion-dollar deals completed so far. In addition, deal count in the $25 million to $100 million range dropped from 45 in 2012 to 28 last year and only 13 in 2014 thus far.
It would appear that SBO activity will continue to chug along at more muted but still solid levels for the rest of 2014, with larger deals capturing more investor attention. The high levels of dry powder will also help keep SBO activity going, even if it isn’t as strong as it was a couple years ago.
To get the data behind these secondary buyout trends and stats, click here.