Q3 exits: KKR’s sale of Capsugel headlines M&A exits in booming Q3

  • KKR’s $5.5 bln Capsugel exit leads in value
  • U.S.-based PE-backed M&A: 160 deals, $34.4 bln
  • High tech led by exit count, 15.6 percent of all exits

Third-quarter M&A activity surpassed the year’s entire first half in value.

Overall, U.S.-based PE-backed M&A saw 160 deals totaling $34.4 billion in Q3 2017 – a near doubling of Q2’s value while matching its deal count. The numbers are current through Sept. 25, so there’s still room for growth. The total 2017 value is almost a mirror image of the first three quarters of last year, but with 83 more completed exits.

The third-quarter totals outpaced the six-year average of quarterly exit count (143 deals), but came in below the value ($23.9 billion).

Of transactions with disclosed value, the largest was the Swiss biotech firm Lonza Group AG absorbing Capsugel Inc, a maker of biopharmaceutical products, from KKR for $5.5 billion.

Of this quarter’s 160 exits thus far, 43 had disclosed values. In that group, 10 reached the billion-dollar mark, including the Capsugel sale.

Advent International dealt healthcare marketing and consulting provider inVentive Health Inc to INC Research Holdings Inc – a unit of Avista Capital Holdings – for about $4.3 billion.

The third-largest exit was conducted by Alinda Capital Partners. Alinda sold its hold on Reliance Home Comfort LP, a producer of HVAC equipment, to CKP Holdings Ltd. Apollo Global Management followed, exiting its interest in Novitex Holdings Inc. The business-support-service provider was bought by Quinpario Acquisition Corp.

After getting ousted by industrials in Q2, high technology was the leading industry by exit count in the third quarter, accounting for 25 exits, or 15.6 percent, of the 160 deals. Consumer products and services placed second with 23 deals (14.4 percent) and industrials followed with 21 deals (13.1 percent).

IPOs keep climbing

PE-backed IPOs had their quietest quarter since Q1 2016. Only one company made its debut on the public market, for $43.8 million, a far cry from the seven for $2 billion in 2017’s second quarter.

The sole offering came from YogaWorks Inc, a provider of online and in-person yoga programs with more than 45 locations, which is backed by Great Hill Partners.

As the accompanying “PE-Backed IPO Exits by Quarter” graph shows, IPOs are an erratic industry, accompanied by a history of sharp fluctuation without much, if any, correlation.

Download exit data and charts here: Q3 2017 Exits

Photo courtesy shironosov/iStock/Getty Images


Additional Data

Buyout M&A Exits By Quarter

PE-Backed IPO Exits By Quarter

Q3 2017 Buyout Exits Through M&A

Select Q3 2017 Buyout Exits Through IPO