Deal-making rebounds as private debt sees record Q2
Dealmaking rebounded in the second quarter of the year, leading to the busiest single quarter recorded by Deloitte’s Private Debt Deals Tracker in its 12-year history.
252 deals were completed in the second quarter, up from 119 the previous quarter. 73 of these deals were UK-based, which is the highest quarterly deal count in the country since the third quarter of 2021.
The majority of deals remain M&A focused, with 70 per cent of activity revolving around an acquisition. Leveraged buyouts made up 32 per cent of deals, while refinancings accounted for 21 per cent, and bolt-on acquisitions 38 per cent.
“Despite a turbulent start to the year geopolitically, as well as newfound momentum in the public debt markets, private debt has fared relatively well as an asset class,” said Andrew Cruickshank, a director at Deloitte and head of the Private Debt Deal Tracker.
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“With further interest rate cuts on the horizon and buyer-vendor valuations gradually beginning to converge, there are positive indications that activity is trending in the right direction. In the UK, for example, we have just witnessed the highest number of quarterly deals since the Deal Tracker’s inception.
“There’s no doubt that, as we head towards the end of the year, the journey for investors will continue to remain choppy. However, we do believe that we have successfully navigated what is likely to prove to be one of the more challenging periods for the market.”
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Deloitte noted that the buoyant second quarter activity may be due to the fact that the average transaction time is taking four to six weeks longer than it did 18-24 months ago, which may have led to a number of first quarter deals spilling over into the following quarter.
The firm also observed that leverage continues to remain subdued, although indications suggest that pricing may be starting to taper.
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