European Private Equity Outlook 2011

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Asset quality and transaction security will improve in 2011 – over the medium term, we expect new challenges ahead Private equity outlook 2011 and beyond 1 2 3 4 5 6 SHORT-TERM TRENDS 2011 Improved asset quality – hot sectors 2011 Comeback of strategic buyers Higher transaction security Focus on mid-size deals Increase in Asian bidders More dual-track auctions 8 9 MEDIUM TO LONG-TERM TRENDS 2012+ Complex refinancings Increasing business model innovation European Private Equity Outlook 2011_Final_010411.PPTX 28
SHORT-TERM TRENDS 2011 In 2011, we expect more strategic buyers in an improving deal environment – Also, auctions will become more competitive Key trends in the 2011 PE environment (1/2) TREND 1 IMPROVED ASSET QUALITY - HOT SECTORS Capital goods Automotive Consumer Goods Financial services Business services 2 3 COMEBACK OF STRATEGIC BUYERS PE buyers Corporate buyers HIGHER TRANSACTION SECURITY Low conversion 4 FOCUS ON MID-SIZE DEALS High conversion Small cap Large cap Mid cap ASSESSMENT > We expect a substantial increase in PE relevant M&A activity in the Automotive, Capital goods, Business services and Consumer goods sectors > In the broader M&A market, we are looking forward to an increase in transactions in Financial services > After focusing on navigating the turbulences of the crisis and the often rapid recovery in 2010, growth is back on the corporate agenda in 2011 > In many industries, leading corporates have amassed substantial amounts of cash and thus represent strong competition in PE auction processes > Substantial number of auctions in 2010, but many have not been completed > Transaction multiples stabilize - banks may commit to slightly more risk towards H2 > Driven by the improvement in overall market conditions and most business' performance, we expect higher transaction security for sellers > As debt capital markets have not recovered yet, large cap deals are likely to remain seldom > In line with a likely recovery throughout the year, the return of larger deals is possible in the long-term European Private Equity Outlook 2011_Final_010411.PPTX 29
Page 1 and 2: European Private Equity Outlook 201
Page 3 and 4: While PE regains momentum after a d
Page 5 and 6: Challenges for the mid and long ter
Page 7 and 8: PE investments are gaining momentum
Page 9 and 10: M&A volumes remain low, average dea
Page 11 and 12: B. A look at the European real econ
Page 13 and 14: Growth in Europe is sluggish and fa
Page 15 and 16: Public budgets are falling into dis
Page 17 and 18: Uncertainty about how the financial
Page 19 and 20: The capital market environment has
Page 21 and 22: High-yield bond market still no alt
Page 23 and 24: Current leverage levels are around
Page 25 and 26: After almost no activity in 2009, t
Page 27: D. Outlook for 2011 and beyond Situ
Page 31 and 32: MEDIUM-TO-LONG-TERM TRENDS 2012+ In
Page 33 and 34: 2 COMEBACK OF STRATEGIC BUYERS Grea
Page 35 and 36: 4 FOCUS ON MID-SIZE DEALS Focus on
Page 37 and 38: 6 MORE DUAL TRACKS As the capital m
Page 39 and 40: 8 INCREASE IN BUSINESS MODEL INNOVA

European Private Equity Outlook 2011

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