Construction Update : Fourth Quarter 2011
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 in 2011 (252 deals) was around 7.4% lower than in 2010 (272 deals). Although deal volume peaked in Q2’11, the average quarterly deal volume of the other quarters in 2011 (c. 54) was significantly lower than the average quarterly deal volume of 2010 (c. 68). The median enterprise value of the disclosed transactions indicates that the deal size was higher in 2011 compared to 2010. However, the decrease in average enterprise value suggests that less very large companies were target of an M&A transaction.
- 252 transactions have been announced during 2011, compared to 272 the previous year. Announced European transactions in Q4’11 (56 transactions) were significantly lower compared to the same period in 2010 (73 transactions);
- 79 private equity backed transactions (either as a buyer or as a seller) have been announced in 2011 which is almost equal to the amount in 2010 (80);
- Average enterprise value per deal in 2011, in case disclosed, is €253m against €1,320m in 2010. Median enterprise value per disclosed deal in 2011 is €56m and higher than in 2010 (€34m). Note that these figures are calculated based on 27% of the deals for 2011 (69 deals) and 40% of the deals for 2010 (110 deals);
- Median transaction multiples decreased from 8.0x EBITDA ratio in 2010 to 4.6x EBITDA ratio in 2011. This is due to some deals with extremely low multiples in Q2’11 and Q4’11. Median transaction multiples during these quarters amounted to 3.2x and 4.2x for Q2’11 and Q4’11 resp.
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