Construction Update : Fourth Quarter 2012
Deloitte Financial Advisory Services
This quarter’s Construction Update, produced by Deloitte Financial Advisory Services, summarizes the most recent transactions along with information on the most active buyers, current transaction valuation multiples and an overview of the public market’s perception of the industry.
This quarter’s highlights
European Construction M&A deal volume decreased by 6.0% in 2012 compared to 2011, while the latter was already 7.4% below the 2010 level. Although deal volume increased quarter-on-quarter during the last two quarters of 2012, there was a 32% decrease from Q1’12 to Q2’12. The median enterprise value of the disclosed transactions indicates that the deal size was higher in 2012 than in 2011 and 2010
- 237 transactions have been announced during 2012, compared to 252 in 2011 and 272 in 2010. Announced European transactions in Q4’12 (64 transactions) were higher than in the same period in 2011 (56 transactions);
- 61 private equity backed transactions (either as a buyer or as a seller) have been announced in 2012 which is 22.8% below the 2011 volume (79);
- Average enterprise value per deal in 2012, in case disclosed, is €1,360m against €253m in 2011. The low average enterprise value in 2011 is driven by the absence of very large deals. Median enterprise value per disclosed deal in 2012 is €65m and higher than in 2011 (€56m) and 2010 (€34m). Note that these figures are calculated based on 33% of all deals for 2012 (78 deals), 27% of all deals for 2011 (69 deals) and 40% of all deals for 2010 (110 deals);
- Median transaction multiples increased significantly from 4.6x EBITDA ratio in 2011 to 8.9x EBITDA ratio in 2012. Median transaction multiples only slightly increased as compared to 2010 (8.0x EBITDA ratio). Note that these multiples are calculated based on a limited amount of deals (30 deals, 11 deals and 22 deals for 2010, 2011 and 2012 respectively).
Belgian Construction M&A deal volume remained rather stable in 2012 (13 deals) compared to 2011 (14 deals). As in 2011, the majority of the deals concerned corporate transactions (c. 62%)
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