The fourth annual AVCAL/Pacific Strategy Partners Deal Metrics Survey of private equity (PE) and venture capital (VC) activity covers $77.7b worth of transactions conducted by 170 funds between FY06-FY12. The database now represents total PE deal value of $76.7b across 774 transactions and total VC equity investment of $963m across 832 transactions. Many transactions from FY06-FY11) have also been updated and refined with new data provided by PE and VC funds. We also conducted 30 interviews with PE and VC funds, industry advisors, and equity and debt providers to gauge the industry’s recent performance and future outlook.
In spite of the difficult macroeconomic climate – hampered by the European and American debt crises – PE transaction value and volume remained consistent (with the exclusion of two outlier deals conducted in FY11). Survey respondents were confident that the deal pipeline in FY12 had improved on FY11, driven by increased succession pressures and converging price expectations.
Market caution saw assets exchange for slightly lower multiples in FY12. However, a common theme emerging from the surveys was that strong prices were still available for quality assets.
Debt availability and fundraising remained tight in FY12, as debt and equity providers became increasingly selective about the PE funds and sectors they were willing to support. Exit conditions also remained difficult and, with IPO markets remaining virtually closed, secondary deals (sponsor-to-sponsor) and trade sales became increasingly popular exit routes.
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