Q4 exits: Berkshire’s sale of internet provider heads M&A exits in strong fourth quarter

  • Berkshire’s $7.1 bln exit of Lightower leads in value
  • U.S.-based PE-backed M&A: 124 Q4 deals, $38 bln
  • Consumer, high tech lead exit count, 16.9 percent of all exits

Fourth-quarter M&A exit activity overshadowed the year’s first three quarters in value.

Overall, 124 U.S.-based PE-backed exits totaled just over $38 billion in Q4 2017 — the highest quarterly value in more than six years. There’s still room for growth, as the numbers are current through Dec. 11. This year’s total value and volume are the highest since 2015 and 2014, respectably.

The fourth-quarter totals went above the six-year average of quarterly exit value ($24.4 billion) and are on pace to surpass the average deal total (144.4 deals).

Of this quarter’s 124 exits thus far, 39 had disclosed values, 10 of which cleared the billion-dollar hurdle.

Of transactions with disclosed value, the largest was for Massachusetts-based internet-service provider Lightower Fiber Networks. It was acquired by Crown Castle International Corp, a wireless infrastructure organization, from Berkshire Partners for $7.1 billion.

Second: Madison Dearborn Partners dealt medical-equipment wholesaler VWR Corp to Avantor Performance Materials Holdings, a unit of New Mountain Capital, for about $6.6 billion.

The third largest exit was Harbinger Capital Partners sold its interest in Fidelity & Guaranty Life, an insurance carrier, to CF Corp for more than $2.2 billion. Lone Star Funds followed, exiting its hold on Heart of La Defense SASU. The Paris lessor of nonresidential buildings was bought by an investor group for $2.1 billion.

High technology led all industries by exit count last quarter and did it again, along with consumer products and services, in the final frame of 2017. The pair tied at the top with 21 exits, each accounting for 16.9 percent of the 124 deals. Industrials placed third with 19 deals (15.3 percent) and materials followed with 13 deals (10.5 percent).

IPO count doubles

PE-backed IPOs doubled up from Q3 2017. The fourth quarter had a quartet of companies making their debuts on the public market. The combined size of these offerings was $860.9 million, more than last quarter but less than Q1 and Q2 of this year.

The largest offering came from National Vision Holdings Inc, one of the country’s biggest optical retailers, going public for $347.6 million. National Vision is sponsored by KKR.

Thoma Bravo-backed SailPoint Technologies Holdings Inc followed. The designer, developer and marketer of identity governance software entered the marketplace for $240 million.

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: Q4 2017 Exits

Graphic courtesy Weedezign/iStock/Getty Images


Additional Data

Buyout M&A Exits By Quarter

PE-Backed IPO Exits By Quarter

Q4 2017 Buyout Exits Through M&A

Q4 2017 M&A Exits Industry Breakdown

Select Q4 2017 Buyout Exits Through IPO