Private equity exits continue to rise in the second quarter of 2018. Impressively, there was a 10% increase in exits from the first to second quarter. Much has been written as of late of the potential boom in sponsored backed exits, and the numbers are confirming this forecast. As a result of the robust climate, including the record breaking amount of dry-powder, investors are using all types of intricate tactics to navigate this market. In fact, this informative – albeit opinionated – piece in the Institutional Investor captures a few noteworthy and perhaps troubling developments currently taking place; it’s well worth the read!


Second quarter exits

Diving into the numbers, the second quarter (as indicated earlier) is picking up steam with approximately 184 private equity exits closing. The bulk of exits closed in April, followed by June and May.

The top target states for exits in the second quarter include: Texas, California, New York, Florida, and New Jersey. Of those exits, 58% traded to a peer private equity fund. Breaking this down by those peer-to-peer private equity sales, the top target states for equity exits aren’t much different overall, but include: Texas, New York and California.


Q2 noteworthy exit

In May of this year, Hellman & Friedman sold its stake in Renaissance Learning to equity investor, Francisco Partners. Renaissance Learning is based in Wisconsin Rapids, WI and is a provider of computer-based assessment and periodic progress monitoring technology for K-12 schools. Macquarie Capital USA acted as the sell-side advisor for this exit.


Further analysis and exit trends

Breaking out the top second quarter exits by subindustries, IT: Software & services; Industrial: Equipment & products; followed by Services: Misc., asset light. Looking at peer-to-peer private equity transactions, IT: Software & services; Industrial: Equipment & products; Services: Misc., asset light; and Services: Education were the top sub-industries.

Of those private equity exits trading in Q2, 9% traded above $1B EV. Moreover, when breaking down the numbers even further, only 24% of those $1B+ EV transactions traded to a peer equity investor.

From April to June 2018, 26% of exits were intermediated by the same three sell-side financial advisors. These firms are highly active in the industry and are bringing together the best minds to facilitate deal-activity. When considering where to spend time building relationships, it is worth taking into account the potential benefits from a relationship with these active advisors. Particularly as a means to understand market activity, as well as which deals are closing and potential deals coming to market. Crafting your community of influencers is mission critical and will help to broaden your coverage network, as well as increase your deal flow of relevant transactions.


Last week’s deals today

July 30 – August 3, 2018

A record ~159 deals traded!

Deal of the week

Equity investor, Brookfield Asset Management, completed its acquisition of Westinghouse Electric Company last week from the Toshiba Corporation. Sell-side advisory services were provided by both AlixPartners and PJT Partners. The Pittsburgh based Westinghouse Electric founding dates back to 1886, and is currently a provider of nuclear plant construction, services, and nuclear fuel. This company has a storied history, including its purchase in the 1990s of the CBS broadcasting company.


Most active subsectors
  • IT: Software & services
  • Industrial: Equipment & products
  • Materials: Chemicals, mineral, & plastics
Most active cities
  • Toronto
  • New York
  • Santa Rosa
  • Houston




Photo by Artem Sapegin on Unsplash

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