Click the star icon to save your favourite articles

Start searching to see results

09.4

The European Exit Environment

2018 has been a truly remarkable and a record-breaking year for outsized outcomes in the European tech industry, capped by Spotify's giant $25 billion direct listing

Top 10 largest VC-backed exits by value at exit in 2018, IPO & M&A

Source:

Top 10 largest VC-backed M&A exits by value at exit in 2018

Source:

Building on top of several large European tech IPOs, Europe has also seen significant exit value via M&A in 2018. Multibillion acquisitions, such as iZettle's $2 billion+ sale to PayPal, have helped to drive the total value of M&A of VC-backed European tech companies to $31 billion in the first nine months of 2018.

European M&A exit value ($B) and count by company type (VC-backed or not)

Source:

Legend

  • VC-backed exit value
  • Non-VC-backed exit value
Note:
M&A exit value based on total enterprise value of all tracked transactions

Strong activity in M&A of VC-backed European tech companies has been underpinned by a record number of acquisitions with an enterprise value of more than $500 million at exit, as well as record numbers of acquisitions of European VC-backed companies acquired for between $250 million and $500 million.

VC-backed M&A exit count by deal size

Source:

Legend

  • $0-$100M
  • $100-$250M
  • $250-$500M
  • $500M+

Contrary to the popular but false narrative that European tech companies exit primarily to US-based buyers, the share of M&A transactions of European tech companies that involved European acquirers exceeded more than 50% of all M&A transactions in 2018, as it has done in each of the past four years.

Share of M&A exits by buyer region by year

Source:

Legend

  • Europe
  • USA and Canada
  • Asia
  • Other (incl. unknown buyer counry)
Note:
Only VC-backed deals included. 2018 numbers estimated by Dealroom.co.

Non-tech corporate investment and M&A activity has increased from year to year

Investments and M&A activity of non-tech corporates involving European tech companies

Source:

Legend

  • Investments
  • M&A transactions

Europe's traditional companies continue to look at M&A as a strategy to accelerate their response to the digitization of their core industries and in several cases took material bets of more than $500 million. The largest single acquisition in 2018 involved Richemont's completion of the 100% acquisition of digital commerce company, Yoox Net-a-Porter, for an implied enterprise value of more than $5 billion.

Largest acquisitions of European tech companies by European non-tech companies in 2018, by EV

Source:

Chinese companies have become active, though infrequent, acquirers in the European tech ecosystem as they increasingly seek to expand overseas and build their international footprints. Alibaba's acquisition of a majority stake in Istanbul's Trendyol for $750 million was the most significant M&A transaction in 2018 involving a European tech company and a Chinese acquirer.

Selected acquisitions of European tech companies by Chinese acquirers

Source: