Q4 exits: Genstar heads M&A exits in a down fourth quarter

  • Genstar drove exit values with Acrisure sale
  • U.S.-based PE-backed M&A: 105 Q4 deals totaled $18.1 bln
  • High tech led industries by number of exits

The private equity M&A market looks to have slumped in Q4.

Genstar Capital drove exit values in the fourth quarter with its sale of Acrisure, a U.S. insurance brokerage for $2.9 billion. The buyer was a management-led investor group.

Overall, U.S.-based PE-backed M&A saw 105 deals totaling $18.1 billion in Q4 2016, beating the year’s opening quarter in value.

But the figures indicate drop-offs of 31 percent in deals and 41 percent in value from the year-earlier period, when 153 deals for $30.9 billion were consummated. Buyouts data covers up to Dec. 12.

The $18.1 billion is also a 34 percent decline in value from the third quarter’s $27.5 billion.

The 105 companies sold by U.S. buyout shops in Q4 reflect declines of 25, 11 and 26 percent from the 140, 118 and 142 offloaded in Q1, Q2 and Q3 respectively.

The fourth-quarter totals also came in below the quarterly averages (136 deals, $23.2 billion) since the beginning of 2011.

Of this quarter’s 105 exits thus far, 31 had disclosed values. Of that group, six broke the billion-dollar threshold, including Genstar’s exit of Acrisure.

Vestar Capital Partners dealt Press Ganey Holdings for about $2.3 billion. The healthcare- consulting firm was acquired by U.K.-based EQT Partners. The third-largest deal, Starwood Capital, sold its interest in 280 service hotels to China Life Insurance for an even $2 billion.

For the second quarter in a row, high technology led all industry by number of exits. Tech accounted for 14, or 13.3 percent, of the 105 deals. Energy and power and healthcare tied for second place, with 12 deals (12.4 percent) each.

IPOs show life

The number of PE-backed IPOs increased. Three companies made their debuts on the public market, up from two in Q3. The value nearly quadrupled, however, to almost $2 billion from Q3’s $550 million. While the quarter was a modest one overall, it was the largest in a quiet year for IPOs.

Athene Holding raised the majority of the financing, collecting more than $1.2 billion for its offering. The retirement-services company is backed by Apollo Global Management.

Advanced Disposal Services South was next in line. The provider of waste-disposal, collection and recycling services went public for $398.5 million. It’s backed by Highstar Capital.

Forterra went public for $331.6 million. The producer of construction materials is sponsored by Lone Star Funds.

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. The last real booming quarter was Q2 2015.

Download exit data and charts here: Q4 2016 Private Equity Exits

Graphic courtesy ©iStock/borzaya


Additional Data