M&A report for Q2 2015 shows solid growth in size and number of European tech exits

We analyse all of the merger, acquisition and IPO activity from Q2 2015, and present our key findings, including the fact that this year is on course to effectively double the total value of 2014's tech exits. M&A report for Q2 2015 shows solid growth in size and number of European tech exits

This year has already seen a sharp rise in the amount of funding European tech companies have raised compared to last year, and now with half of the year well and truly behind us, we can get a good feel of how the exit scene is shaping up for EU tech companies too, as we bring you our analysis of Q2's mergers, acquisitions and IPOs.

Across April, May and June 2015, we saw a total of 162 European tech companies secure an exit, totalling a massive €47.95 billion.

This is a significant increase on Q1 which saw 140 exits with a cumulative value of €37.53 billion. Most tellingly, it means that 2015 has already seen a higher value of disclosed exits (€85.48 billion) than has monitored for the whole of 2014 (€80.14 billion).

For an in-depth analysis of 2014 European tech exits, check out our report. Also, to keep updated on what's happening in the European tech scene, you're well-advised to subscribe to our weekly newsletter: Alright, let's dive deeper into the data (if you like data, also check out Radar). The fact that the value of 2015 EU tech exits already trumps that of full year 2014 comes despite there only being a total number of 302 exits in Q1 and Q2 of this year, compared to 358 in the whole of 2014, meaning the average size of an exit has risen 26.45% from €223.8 million in 2014 to €283 million in the first half of 2015. (Of course, this is only from exits where the value was disclosed)

Year over year, the number of EU tech exits has increased by 76% (from 92 M&A transactions in Q2 2014 to 192 in the second quarter of 2015), and the total value of exits jumped a whopping 206% - from $15.76 billion in Q2 2014 to almost $48 billion in Q2 2015.

Breaking down the 162 exits tracked in Q2 by transaction type:

10 IPO's in the quarter was above the average seen in 2014 of total acquisitions (6.17% compared to 4.95%) but draws parallels with Q2 in 2014.

Incredibly, the top 10 largest exits accounted for 78.69% of the total of disclosed exits in Q2:

The top 10 largest deals were dominated by the telecoms industry, with 02 UK's sale to Hutchison Whampoa easily topping the lot.

Outside of telecoms, we saw Yoox and Net-a-Porter's merger claiming a spot in the top 10 deals as the value of the deal was pegged at €3.2 billion.

Sophos sneaked into the top 10, as the cyber security company became the biggest initial public offering for a UK software group in Q2 2015 when it floated with a market capitalisation of €1.4 billion.

A list of notable deals in Q2 2015 that didn't make it into the top 10 by size:

- Microsoft buying Berlin's 6Wunderkinder - Vivendi acquiring an 80% stake in DailyMotion from French carrier Orange for €217 million - Delivery Hero buying Turkish food ordering website Yemeksepeti for $589 million - Apple acquiring Metaio - France’s BlaBlaCar buying Germany’s - British property search website Zoopla buying price comparison service uSwitch for $247 million - ProSiebenSat.1 acquiring online price comparison business Verivox for up to €210 million - The IPOs of Germany's and Sweden's Tobii - Opera Mediaworks snapping up Mobilike, one of the leading mobile ad networks in Turkey - GoPro purchasing Kolor, a French company that specialises in virtual reality software - The merger of Songkick and Crowdsurge - Wahanda gobbling up The Netherlands’ Treatwell for £24 million

And here's a graph showing the top 10 EU tech exits by size without those pesky telcos:

Mainly due to the increase in IPO's, Q2 (37.04%) saw a lot more disclosed deals than Q1 (25%) which could help explain the significant increase in the amount of total exits.

However, it's worth noting that 37.04% disclosed deals is pretty much in line with 2014's (35%), meaning it's safe to compare the two in terms of exit amounts and adds validity to the argument that Europe is on course to double 2014's total value of European tech exits.

No major surprises here, as the usual suspects lead the way, with Germany, UK and Israel making up the top three.

Just like in 2014, companies from the US bought the most European tech companies, accounting for 24.67% of the acquisitions. Interestingly though, this is significantly down on the 37% that we saw in 2014. However, the US' biggest tech companies were still buying European in Q2, with Google, Microsoft and Apple all shopping here.

Outside of the US though, there are not many companies from countries situated outside of Europe who are buying European tech companies, with 70% of transactions solely European.

It's no surprise then that the most prolific buyers in Q2 were all based in Europe and included Just-Eat (3), ProSiebenSat.1 (2), Rocket Internet (2) and BlaBlaCar (2).

In conclusion, the key findings from Q2's European tech exits are:

- The total value of exits in 2015 has already surpassed 2014, and 2015 is on course to see 600+ exits worth over €150 billion. - The US remain the biggest buyer, however the percentage of acquisitions they account for significantly dropped compared to 2014. - The world's biggest tech firms are still buying European (Microsoft, Google and Apple). - The average (disclosed) M&A transaction size has risen 26.45% to €283 million.

To place these findings into further context then check out our Q1 2015 exit analysis, and our comprehensive report on the exit scene for the whole of 2014, which you can purchase here.

Featured image credit: Lemon Tree Images / Shutterstock

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