Q3 2019 Private Equity Industry Trends

Q3 2019 Key Highlights

The overall industry’s largest sponsored transaction in Q3 2019 was private equity firm EQT and Canada Pension Plan Investment Board’s (“CPPIB”) acquisition of a majority stake in Waystar, a revenue cycle management (RCM) provider, for $2.7 billion.

Regarding the Media horizontal, the largest sponsored transaction in Q3 2019 was Bain Capital’s acquisition of a majority stake in The Kantar Group, a market research company, for $2.4 billion.

As for the Infrastructure Software segment, the largest sponsored transaction in Q3 2019 was BC Partners’ announced acquisition of Presidio, which offers digital infrastructure, cloud, and security solutions, for $2.3 billion.

Q3 2019 Key Trends

Total transaction volume in the 1st 3 Quarters of 2019 increased by 19 percent over the 1st 3 Quarters of 2018, from 663 to 789.

Total transaction value in the 1st 3 Quarters of 2019 gained 11 percent over the 1st 3 Quarters of 2018, from $65.2 billion to $72.2 billion.

Multiples & Value Trends

The median revenue multiple on a year-over-year basis rose from 2.5x to 3.2x. The median EBITDA multiple during this timeframe remained nearly constant at 12.6x.

Top Ten Deals Through Q3 2019

The top ten deals by value have seen four new additions since our half year report, two of which occurred in the Healthcare vertical: the previously mentioned acquisition of Waystar; and Centerbridge Capital Partners’ announced acquisition of GoHealth, an online health insurance marketplace, for $1.5 billion.

These four transactions, with an aggregate value of $8.9 billion, represented 12 percent of transaction value in the 1st 3 Quarters of 2019 and 31 percent of Q3 2019 transaction value.