Private Equity: Riding the Wave
Private Equity, The Netherlands | Report | Q2 2021
M&A activity in the Netherlands has shown a remarkable recovery from COVID-19, with an all-time high deal count and strong valuations in Q1 2021. These trends continued in Q2 2021, with similar deal flow and valuations.
Looking ahead, the future looks bright. PE funds are raising record amounts in less time than ever before with regular oversubscription. At the same time, global monetary institutions seem to stick to support policies, resulting in a strong economic outlook for the remainder of the year and fueling the abundancy of debt at attractive terms. These fundamentals support a continuation of vigorous deal activity and premium valuations, as can be read in our newest report.
M&A activity in the Netherlands
The M&A market has shown a remarkable recovery with an all-time high deal count in Q1 2021 which remained at a similar level in Q2 2021.
After a dramatic decline in deals in Q2 and Q3 2020, deal count recovered in Q4 2020 and has remained at these remarkable levels of 300+ deals per quarter ever since. In Q2 2021, the number of deals was 87% higher than the COVID-19-affected Q2 2020 with an average monthly deal count of 101 in Q2 2021 and 54 in Q2 2020. Ever since Q4 2020, the average monthly deal count has been around 100 deals per month, showing a promising sign of sustained economic prosperity.
After the full scale of the economic damage from the COVID-19 crisis became more clear to Dutch debt providers in Q4 2020, they cautiously started to provide debt again where they were previously reluctant to do so. In Q2 2021, traditional banks especially restored their (acquisition) financing activities to pre-COVID-crisis levels as they increasingly engaged in financing agreements typically regarded as riskier.
On top of that, PEs are in need of finding a return on investment for the large pile of dry powder they are sitting on resulting in the PE deals count remaining on course in Q2 2021. The slight decrease in deals follows from PEs completing several processes over the past quarters and needing time to start up new ones.
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