Q2 exits: GPs post fewest sales in past six years

Sales of sponsor-backed companies hit a six-year low in the second quarter.

All told, sponsors sold just 84 portfolio companies for a total disclosed value of $8 billion, as of June 10, Thomson Reuters reported.  That follows a lackluster Q1, when 144 sponsor-backed companies were sold for a total disclosed value of $23.4 billion.

Equally troubling: The number and value of U.S.-based, PE-backed sales are far below their seven-year averages of 148 deals for a disclosed value of $26.4 billion per quarter.

You have to go all the way back to Q1 2013 to find a quarter on par with Q2 of this year. At that time, 105 sponsor-backed companies were sold for a disclosed value of $8.4 billion.

Of Q2’s 84 exits, 16 had disclosed values, four of which crossed the billion-dollar threshold.

The largest belonged to Ampersand Capital Partners, which sold Brammer Bio LLC, a Cambridge-based manufacturer of biological products, to Thermo Fisher Scientific Inc for $1.7 billion.

The second-largest sale was for Accudyne Industries, a manufacturer of automatic environmental controls. The industrials company was sold by joint owners BC Partners and Carlyle Group for $1.5 billion to Ingersoll-Rand PLC.

The third-largest sale was also in the industrials sector. Blackstone Group sold Cloverleaf Cold Storage Co, a provider of refrigerated warehousing and storage services, to Americold Realty Trust for more than $1.2 billion.

Healthcare was the leading sector, accounting for about 20 percent of all M&A exits with 16 deals. Industrials followed closely with 15 deals that represented about 19 percent of the total. At third was financials with 10 deals for about 14 percent.

IPOs going steady

Public offerings were the silver lining for Q2 exits. Ten sponsor-backed companies debuted on U.S. public markets, up from seven companies that debuted in the first quarter.

The largest was Avantor, which offers materials, equipment and services to companies looking to enhance production workflow. The New Mountain Capital-backed company raised more than $2.9 billion in its IPO.

Tradeweb Markets completed the second largest PE-backed IPO, raising more than $1 billion. The fintech company is backed by Blackstone Group, CPPIB and GIC.

As the accompanying “PE-Backed IPO Exits By Quarter” graph shows, the IPO market has been erratic, with PE-backed IPOs fluctuating sharply quarter to quarter.