Club deals

The ratio of add-ons to buyouts has reached a decade high.

Add-on acquisitions captured over half of deal value in the northern European region last year.

EQT and CPP, existing investors in the global school operator, will support its continued growth.

Increased risk and economic uncertainty are making it harder to get multiple lenders on the same page, hamstringing some lenders’ willingness to lead a club deal.

After recently backing away from so-called club deals that bring together multiple firms, the industry now has its largest acquisition in years.

The third in a series exploring buyout multiples, this analyst note examines pricing differences between secondary buyouts, club deals and add-on acquisitions.

Club deals are something of a sticky issue in the private equity world. However, with a reputation for good performance and a decreased chance of bankruptcy, they may be regaining popularity.

This note addresses the stigma toward club deals and utilizes PitchBook data to showcase their potential advantages and to highlight performance differences between club deals and sole-sponsor deals.

Club deals (and larger deals in general) have lost some of their allure, as PE investors increasingly find their previous large deals to be either wholly unsuccessful, essentially a wash or difficult to exit.