North America Private Equity Report: Q2 2023
North America continued to lead in global buyout activity in Q2 2023, representing 40% of all buyouts.
What's Included
North America Market Update
- North America Buyout Activity
- Value of North America Buyouts
- North America Exit Activity
- Value of North America Exits
- Average North America Buyout
- Average North America Exit
- YoY Growth of North America Buyouts
- YoY Growth of North America Exits
North America Sector Trends
- North America Buyout Activity by Sector
- Value of North America Buyouts by Sector
- North America Exit Activity by Sector
- Value of North America Exits by Sector
- Average North America Buyout by Sector
- Average North America Exit by Sector
- YoY Growth of North America Buyouts by Sector
- YoY Growth of North America Exits by Sector
Key Findings
Shift in Buyout Activity and Dollars: North America continued to lead in global buyout activity in Q2 2023, representing 40% of all buyouts, even though its share saw a slight decline from the previous quarters. However, when it came to the total value of buyouts, North America ranked second, capturing 37% of global buyout dollars, compared to Western Europe's 42%.
Funds Defer Exits for Higher Valuations: Even as buyout activity surged, North America's share of global exits dipped to 34% in Q2 2023. Though global exit activity has been on a decline, North America's decline is steeper than other regions. This pattern suggests funds are acquiring assets at a discount but are reluctant to exit at lower valuations.
Private Markets Love Technology Deals: The Technology sector has seen a significant uptick in buyout deals in North America, accounting for 38% of deals in Q2 2023, up from just 14% in 2013. Yet, when it comes to the value of these deals, Technology stands fourth, securing just $10 billion from buyout firms in Q2 2023. In contrast, Healthcare, Real Estate, and Industrials secured the highest buyout dollars.
Average Deal Sizes Across Sectors: Average buyout sizes in North America have hit a 10-year low, with the average buyout deal in Q2 2023 being $90 million. This contrasts sharply with previous years where averages were $130 million in 2022 and $210 million in 2021.
Market Update
North America ranked #1 globally for buyout activity in Q2 2023, although its share declined slightly over previous quarters.
The US/Mexico/Canada region accounted for 40% of all buyouts globally last quarter, compared to Western Europe which accounted for 31%.
For context, during peak buyout activity in 2022, North America accounted for 44% of all buyouts deals.
While North America's share of global buyout activity has shrunk recently, deal volume is actually up on an absolute basis in the region -- just not as much as in Western Europe.
There were 778 buyout deals in North America in Q2 2023, up +7% YoY. In fact, it was the second-biggest quarter ever for North America deal activity, and the second-consecutive quarter for increasing deal activity.
It's a sign that funds are hunting to do more buyout deals than they did during the tepid market in late-2022.
Although North America ranks #1 for buyout activity, the region actually ranks #2 for the total value of buyout deals.
North American companies captured 37% of global buyout dollars in Q2 2023 compared to Western European companies which attracted 42% of buyout dollars.
It's an indicator that funds are taking calculated risks with buyouts in North America -- targeting smaller, but more frequent deals.
Unlike buyout activity, where North America deal activity is increasing, buyout dollars deployed to North America are still actually declining compared to last year.
While buyout activity was up +7% YoY in North America in Q2 2023, buyout dollars deployed to the region were actually down -15%. This again reaffirms the point that deal sizes have not kept up with the rebound in deal activity.
