Exit types (e.g. Trade sale, IPO, Write off) are reported by the number of companies divested and their equity amount at cost by stage, sector and geography. Divestment amounts at cost reflect the equity initially invested but do not show any profit on the investment.
Divestments at cost in 2021 are up roughly 60% from the year before, to €41bn from €26bn. This is a significant increase, and above the average for the five previous years (€37bn). 3,720 European companies were exited during the year, a 13% increase from 2020.
The main exit route by amount was sale to another private equity firm (36%), followed by trade sale (29%) and then repayment of preference shares / loans or mezzanine (12%). By number of companies, repayment of preference shares / loans or mezzanine was the most popular exit route (32%), followed by trade sale (19%) and sale to another private equity firm (14%). Average holding period for companies divested during the year was in a range of 5.5-6 years for all strategies except turnaround/rescue, where it was just above 6.
Venture divestments in 2021 reached their second highest level ever recorded: €2.9bn at cost were divested, representing a 16% increase from the year before. This is also above the average for the past five years: €2.3bn. 1,317 companies were exited, roughly in line with numbers seen over the past three years (which were in a range of 1,301-1,352). The main exit route by a significant amount was by trade sale (52%), this was followed by public offering and sale to another private equity firm (12% of amount for both). 40% of exited companies were in the ICT sector, followed by biotech and healthcare (17%), and business products and services (14%).
Buyout divestments saw a 75% year-on-year increase, reaching €29.4bn in 2021. This is the highest level of divestment seen since 2017. 930 companies were divested, up 44% from 2020. The main exit route by both amount & number of companies was sale to another private equity firm (41% & 24% respectively). Following this was by trade sale (in terms of amount, 28%), and via repayment of preference share/loans or mezzanine (in terms of number of companies, 24%). ICT was the sector with most exits by amount (22%). In terms of number of companies business products and services saw most exits (28%).
Growth divestments amounted to €7.6bn in 2021, a 46% increase from 2020 and above the average for the previous five year (€6.7bn). 1,593 growth companies were divested, the second highest amount ever recorded. The main exit route by amount was trade sale (28%), followed by sale to another private equity firm (26%). Companies in the consumer goods & services sector (27%) saw the most exits, whilst in terms of value ICT was the most important sector (25%).
|2021 - Market statistics||All private equity||Venture Capital(1)||Buyout(1)||Growth(1)|
|Divestments - Amount||€41bn||€3bn||€29bn||€8bn|
|Divestments - No. of companies||3,720||1,317||930||1,593|
|No. of firms||748||365||347||285|
|No. of funds||1,972||834||643||857|
Source: Invest Europe/EDC
Note: (1) relates to the initial investment stage of the portfolio company.
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