This week’s PE activity has included a number of secondary buyouts, which cued our interest in a closer look at SBO levels as 3Q winds down. Diving into the PitchBook Platform, which has tracked nearly 3,800 such deals since the start of 2005, it looks like the year could end strong for SBOs. PE firms have completed 356 with other buyout shops so far this year—a figure that initially put 2014 on pace to finish behind 2012 and 2013—but 3Q was 2014’s top quarter thus far, while an additional 74 deals have already been announced (presumably with most set to close in 4Q). Also worth noting is 4Q historically has recorded 45% more SBOs than other quarters over the past two years on average.
Click to explore the data on the PitchBook Platform
SBO activity has been particularly solid in the U.S., with 201 completed deals—a fine pace set to surpass last year’s 237. The country has also claimed 57% of SBOs worldwide, a percentage well up from 2013 (48%) and tracking close to 2012’s record for the decade. Europe, on the other hand, is behind last year’s pace, accounting for just 38% of SBOs compared to 2013’s 47%. Consistent with PE industry trends, add-ons comprise a sizable amount of 2014's SBOs at 19%, while deal size is also trending up with 19% at or exceeding $1 billion.