We are pleased to share with you the 2024 edition of the CMS European Private Equity Study, a comprehensive analysis of hundreds of private equity deals CMS advised on across Europe in 2023 and previous years.
Here are a few of the key findings:
- Deal activity remained stable despite economic challenges.
- New investments accounted for 69% of PE deals analysed; 50% were add-on acquisitions.
- TMT led sector activity at 24%, followed by Life Sciences and Consumer Products at 15% each.
- Earn-out provisions declined but stayed above pre-pandemic levels.
- ESG due diligence was conducted in 47% of PE deals.
- Arbitration clauses were used in more than 50% of PE deals.
- FDI approval was required for 21% of PE deals in 2023.
- Warranty & Indemnity insurance was prevalent, especially in larger deals.
- Management incentive schemes saw more share options and shorter vesting periods.
Key markets, including Germany, France, and the UK, continue to support robust deal activity with favourable regulatory environments and abundant capital. However, investors are expected to continue to exercise vigilance, focusing on high-quality assets and strategic opportunities to effectively manage risks and we expect to see more exit activity in the next half of 2024.
