Last December 31st 2016 private equity funds had stakes in 667 Italian portfolio companies which had been bought between 2006 and 2016 out of a total of 1,015 companies bought in the same period (so they had exited 348 companies in the period), MF Milano Finanza wrote last Saturday.
Those data come from the last Castellanza University’s Private Equity Monitor (Pem) annual report, which is chaired by Anna Gervasoni, directed by Francesco Bollazzi and supported by Eos Investment Management, EY, Fondo Italiano di Investimento sgr and McDermott Will & Emery law firm. The new annual report is going to be presented this afternoon in Milan (see here the event program).
The average holding period of a portfolio company dropped to 5 years at the end of 2016 data show, down from 5 years and 3 months the year before and in line with years 2014 and 2013. Which means that all companies entered in funds’ portfolios before 2012 (which are 270) might be ready to be sold by the funds.
Coming back to statistics, previous Private equity monitor annual reports showed that at the end of 2015 private equity funds still had 612 stakes in Italian portfolio companies out 1009 stakes they had acquired in the previous 11 years (from 2005 to 2015) , while at the end of 2014 they had stakes in 567 compies out of 958 they had acquired in the previous 11 years (from 2004 to 2014) (see here a previous post by BeBeez).
Out of the 348 exits made by the funds in the period 2006-2016, the major part (36%) consisted in releverage deals (i.e. sale to other funds), a 33% in trade sale (i.e. sale to industrial buyers) and just a 4% through an ipo on a Stock Exchange. Buybacks from previous shareholders were just 6% of the total, while there were an 8% of total or partial write-offs.
As for the new investments, they were 100 in companies with average revenues of 39.8 million euros and an average enterprose value of 81.5 million euros equal to a median 7,9x ebitda multiple (versus a 7,6x ebitda multiple in 2015) which is the highest multiple in 11 years.