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Research

Divestment data analysis

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2020 Key Findings

Exit types (e.g. Trade sale, IPO, Write off) are reported by the number of companies divested and their equity amount at cost by stage, sector and geography. Divestment amounts at cost reflect the equity initially invested but do not show any profit on the investment.

3,160 European companies were exited in 2020

Divestments at cost in 2020 are down 34% from the year before, to €23bn. This is the lowest divestment level in a decade. 3,160 European companies were exited during the year, an 18% decrease from 2019.

The main exit route by amount was sale to another private equity firm (35%), followed by trade sale (25%), and public offering (12%). By the number of companies, repayment of preference shares / loans or mezzanine was the most popular exit route (34%), followed by trade sale (15%), and write off (12%). Average holding period for companies divested during the year was just under six years for all strategies except buyout, where it was just above.

Venture divestments

Venture divestments in 2020 returned to 2018 levels after a record year for the past decade in 2019. €2.3bn at cost were divested, an 18% decrease year on year. 1,240 companies were divested, an 8% decrease. The main exit route by amount was by trade sale (36%). 39% of exited companies were in the ICT sector, followed by biotech and healthcare (18%), and business products and services (16%).

Buyout divestments

Buyout divestments saw the heaviest year on year decrease, a 40% year on year drop to €16bn in 2020. 619 companies were divested, down 29% from 2019. The main exit route by amount was sale to another private equity firm (42%), and by number of companies was trade sale (21%). Business products & services was the sector with most exits by number of companies (31%).

Growth divestments

Growth divestments amounted to €4bn in 2020, a 24% decrease. 1,309 growth companies were divested, 41% of all private equity divested companies for the year. The main exit route by amount was sale to another private equity firm (23%). Companies in the consumer goods & services sector (24%) saw the most exits.

2020 divestments at a glance

2020 - Market statistics All private equity Venture Capital(1) Buyout(1) Growth(1)
Divestments - Amount €23bn €2.3bn €16bn €4bn
Divestments - No. of companies 3,160 1,240 619 1,309
No. of firms 676 342 278 262
No. of funds 1,750 808 484 785

Source: Invest Europe/EDC

Note: (1) relates to the initial investment stage of the portfolio company.

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