European Private Equity Outlook 2011

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