Construction Update : Third Quarter 2013
Delotite 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
While the European Construction M&A deal volume dropped by 6.0% in 2012 compared to 2011,deal volume in the first 3 quarters of 2013 shows an upward trend. Compared to the same period in 2012,the deal volume in Q1-Q3’13 went up by 7.5%. Furthermore, the number of transactions has been increasing since Q1’13. However the deal size shows a downward trend in 2013.
- 186 transactions were announced during the first three quarters of 2013, compared to 173 in 2012, an increase by 7.5%. Considering the last 12 months, the number of European transactions at Sept’13 amounted to 250 vs. 237 over the full year 2012. This represents a rise by 5.4%;
- 42 private equity backed transactions (either as a buyer or as a seller) have been announced during Q1-Q3’13 compared to 61 in 2012;
- For the transactions for which the deal size has been disclosed, the average enterprise value during Q1-Q3’13 amounted to €859m against €1,360m in 2012. Again, the average enterprise value during Q1-Q3’13 is driven by a mix of very large deals vs. small deals. Some of these large deals include the Grohe AG transaction (see below). The median enterprise value during Q1-Q3’13 was €33m against €65m in 2012 and €56m in 2011. This reflects the fact that there are a lot more smaller deals in 2013 as compared to prior years;
- The median EV/EBITDA transaction multiples declined from 8.9 in 2012 to 7.6 in Q1-Q3’13, which is closer to the longer term average, excluding the exceptionally low 2011 multiples. These multiples are however only provided for indicative purposes and might be biased given the relatively low number of deals for which this information is published.
The Belgian Construction sector appears to follow the European trend with the number of M&A transactions during Q1-Q3’13 already reaching the level of full year 2012 (13 deals). Even more than in 2012, the majority of the deals in 2013 concerns corporate transactions (77%) vs. private equity transactions (23%).
Download the Construction Update for more info.