The traditional summer slowdown was in full effect in Europe during July, with total private equity sponsored loan issuance reaching only €3 billion by month-end, in a dramatic drop from €15.2 billion in June. No buyouts were syndicated in the European loan market in the month, with €1.5 billion issued to refinance debt, €1.2 billion funding M&A-related activity, and the remainder earmarked for a small dividend payment.
Good year
Despite the summer lull, total sponsored volume reached €53.3 billion in the year through July, which (excluding 2021’s bumper €109 billion tally) is already higher than the full-year figures back to 2018. Buyout activity remained lacklustre in this period, running at only €9.3 billion — however this effort has already surpassed the full-year 2023 tally, while sponsored issuance for other M&A totals €9.2 billion. With a chunk of the year still to go, this activity represents a healthy volume level, with the 10-year average in Europe (to the end of 2023) standing at €11.3 billion on the latter measure.
The quarterly data also emphasizes the recent uptick in sponsored M&A-driven loan supply, as total volume reached €11.8 billion in the second-quarter, the highest level since 4Q 2021. What's more, some chunky buyout financings are likely to materialise in the autumn.
Back to the future
For example, LCD’s pipeline of deals mandated but not launched to a bank meeting includes a deal to finance Apollo’s purchase of British parcel delivery firm Evri from Advent for £2.7 billion. HSBC is advising Apollo, and the deal is expected to be backed by a syndicated financing covering bonds and loans.
Elsewhere, syndicated financing in a €650 million to €700 million range is expected to support Ardian’s buyout of French kitchen small-appliance makers Robot Coupe and Magimix. Further supply could also come from France if CD&R's bid to take cybersecurity firm Exclusive Networks private for €2.2 billion is successful. The binding proposal here values the firm at €24.25 per share, which represents a 30% premium to where the equity was trading in March.
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