Q1 exits: IPO market heats up for PE, led by Blackstone’s Invitation Homes

  • American Capital led exit values with sale to Ares
  • U.S.-based PE-backed M&A: 117 Q1 deals totaled $14.4 bln
  • Tech leads industries by exit count, 21 pct of all exits

In Q1 2017, PE-backed IPOs had their biggest quarter in more than a year. Five companies made their debuts on the public market, up from Q4 2016’s three and the highest count since Q2 2015.

The value shot up as well, going to $3.1 billion from Q4’s $2 billion. This represented the biggest aggregate value since Q4 2015’s $3.2 billion.

The majority of the financing came from Invitation Homes LP, collecting nearly $1.8 billion for its offering. The lessor of single-family homes is backed by Blackstone Group.

Laureate Education Inc was next in line. The education network went public for $490 million and is sponsored by Kohlberg Kravis Roberts and Citigroup Private Equity.

ProPetro Services Inc hit the public market for $402.5 million. The oilfield services company is backed by Energy Capital Partners.

As the accompanying “PE-Backed IPO Exits by Quarter” graph shows, IPOs have a history of sharp fluctuation.

Slow Q1 for exits

While there is still time for it to develop, first-quarter 2017 brought a depressed private equity M&A market.

Overall, U.S.-based PE firms had 117 exits totaling $14.4 billion in Q1 2017, reflecting drops of 25 percent and 47 percent respectively from Q4 2016’s 157 deals and $27 billion in value.

Based on the past few years, Q1 figures tend to be lethargic. The figures for 2017 are in line with Q1 2016’s 140 deals combining for $15.6 billion — especially with the boost that usually comes at the quarter’s end. Buyouts data covers up to March 20.

The first-quarter totals also came in below the quarterly averages (139 deals, $23.7 billion) spanning the past six years.

Of this quarter’s 117 exits thus far, 29 had disclosed values. Of that group, three cleared the billion-dollar hurdle. The largest deal of those with disclosed value was Ares Capital acquiring fellow PE firm American Capital for just under $3.2 billion.

Warburg Pincus dealt assets of Brigham Resources for about $2.4 billion. The petroleum refiner was the second-largest deal of the quarter and was acquired by Diamondback Energy Inc.

RCN Corp rounded out the triad. ABRY Partners exited its hold on the television and internet provider to TPG Capital for $1.6 billion.

For the third quarter in a row, high tech led all industry by number of exits. Tech accounted for 24, or 21 percent, of the 117 deals. Consumer products and services placed second with 17 deals (15 percent) and industrials closely followed with 14 deals (12 percent).

Download exit data and charts here: Q1 2017 Exits Data


Additional Data

Buyout M&A Exits By Quarter

PE-Backed IPO Exits By Quarter

Q1 2017 Buyout Exits Through M&A

Q1 2017 M&A Exits Industry Breakdown

Select Q1 2017 Buyout Exits Through IPO