Recent data from Pitchbook has revealed that Europe saw new annual records set in terms of private equity (PE) deal count and value in 2021, with close to 7,200 deals closed worth 754.5 billion euros ($856 billion).
Those figures were significantly higher than the previous 2019 record of 4,566 closed deals and the 2018 record of 498.2 billion euros ($565 billion) in deal value.
“2021 was the best environment for PE dealmaking ever, characterized by strong leveraged lending markets, willing sellers, heightened dry powder and massive stimulus,” the reported stated, adding that widespread government fiscal injections and vaccines across Europe also helped to keep economies and markets in the region “relatively stable.”
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Despite the impact of Brexit, the U.K. and Ireland remained the top destination for private capital in the region, recording a 4x growth in deal value compared to a decade ago.
The U.K. was also home to the largest PE deal of the year, with the country’s fourth largest supermarket chain Morrisons agreeing to a 8.2 billion euros ($9.3 billion) takeover by U.S. private equity group Clayton, Dubilier & Rice (CD&R) in August 2021.
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Overall, the two countries combined accounted for the most 1 billion euro-plus ($1.13 billion-plus) transactions in Europe last year and recorded 1,669 deals closed worth 200.6 billion euros ($227 billion), representing a year-on-year increase of 39% and 67.7%, respectively.
Looking at specific industries, IT, healthcare and financial services sectors all hit peaks in deal value and volume last year, buoyed by the “increased use of software to drive efficiency, scale and profitability.”
The report further highlighted PE growth in the healthcare space as demand for drug research and discovery grows alongside an increase in the use of technology and innovation in healthcare provision due to the pandemic.
Another sector riding the digitalization wave is the financial services industry, following a rapid adoption of FinTech platforms in payments, insurance technology (InsurTech), and regulation technology (RegTech), the report added.
Read more: Europe VC Ecosystem Smashes Records In Q3 2021, Setting The Stage For Promising 2022 Deals
When it comes to venture capital (VC), a subset of PE, valuations in the region continued to gain traction in 2021, ending last year with a record-breaking third quarter as more capital has entered the earlier stages of the VC lifecycle.
The average angel and seed pre-money valuation stood at 3.8 million euros ($4.3 million) during that period, a 22.5% increase than the record set in 2020, PYMNTS reported, per Pitchbook.
Here again, the U.K. and Ireland remained the main VC hub of Europe, and investment in their firms was above 2020’s numbers across all financial stages.
Learn more: VC Investment in French Startups Doubles in 2021 to Hit $11.3B Despite Funding Gap Between Regions
Another country that is also making VC waves is France, where VC investment in French startups doubled from 5.1 billion euros ($5.7 billion) in 2020 to over 10 billion euros ($11.3 billion) in 2021. The combined enterprise value of French startups founded since 2000 has already increased significantly, up 17.7x since 2010 to reach 179 billion euros ($203 billion) in 2021.
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