Delivering Carve-outs in Uncertain Times
27 Apr 2023
27 Apr 2023
The volume of divestments as a percentage of total deal volume has historically been around 2-4% in the period up to 2020. However, as M&A activity bounced back in 2021 and 2022, divestments have become a key driver in the volume of deals done – with now around a quarter of all deals being considered a divestment in 2023.
The volume of Divestment M&A is only one part of the story. These deals have traditionally been viewed as more complex and therefore may discourage risk-averse investors. As divestments have become a more familiar element to the M&A environment, so to have the mechanics for preparing such an asset for sale. Moreover, buyers are better informed and prepared to enter processes for carve-outs, and this brings more bidders to the table.
In our whitepaper, we explore the following themes for 2023:
- Strong interest in carve-out deals, despite a falling M&A market
- A significant increase in EBITDA multiples from carve-out deals
- Large variations in sector activity, with carve-outs now accommodating for over 50% of Energy & Utility transactions
- The best prepared sectors, where carve-out deals generate significant price arbitrage vs non-carve out deals
We then explore how buyers and sellers can facilitate carve-outs in 2023, and what risks lie ahead for deal makers of these deals.
Enjoy the read!
To read our report, Click here.