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Research

Divestment data analysis

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2018 Key Findings

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.

3,750 European companies were exited in 2018

A 3% decrease on the previous year. By amount of former equity investment (divestment at cost), the total value was €32bn, a year-on-year decrease of 28%. The most prominent exit routes by amount at cost were trade sale (32%), sale to another private equity firm (31%) and public offering (10%).

Buyout divestments

Buyout divestments represented 70% by amount at cost and 23% of exits by number of companies. They decreased 34% by amount to €22.4bn and 12% by number of companies to 863. The decline was due to falls in activity across the three main exit routes: trade sale, sale to another private equity firm and public offering. Most companies that were exited operated in the business products and services sector, followed by consumer goods and services, and ICT.

Venture divestments

Venture divestments represented 6% by amount at cost and 32% by number of companies. They decreased 5% by amount at cost to €2bn, while 1,193 companies were exited, a 1% decline. Trade sale was the most prominent exit route accounting for 35% by amount at cost, despite an 8% year-on-year decrease. Public offerings rose 39% to a ten-year high, representing a 22% share of amount at cost. Most companies exited operated in the ICT sector, followed by biotech and healthcare, and business products and services.

Growth divestments

Growth divestments represented 18% of all exits by amount at cost and 42% by number of companies. They decreased 15% by amount to €5.8bn and 2% by number of companies to 1,571. The main exit routes were trade sale and sale to another private equity firm. Most companies exited operated in the business products and services sector, followed by consumer goods and services, and ICT.

Write-offs recorded their lowest level in ten years by amount and number of companies divested.

2018 divestments at a glance

2018 - Market statistics All private equity Venture capital(1) Buyout(1) Growth(1)
Divestments - Amount €32.0bn €2.0bn €22.4bn €5.8bn
Divestments - No. of companies 3,750 1,193 863 1,571
No. of firms 756 344 354 303
No. of funds 1,899 772 645 881

Source: Invest Europe/EDC

Note: (1) relates to the investment stage of the portfolio company.

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Julien Krantz

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Ariane Mortelmans

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