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04.5 Mergers & Acquisitions

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The aggregate value of exits of European tech companies via M&A exceeded $90B by the end of September 2020, on track for the strongest year since 2016.

European M&A exit value per year

The vast majority of exits of VC-backed European tech companies are small in scale. In fact, exits via M&A that are valued at $100M or lower, including those that involve undisclosed exit valuations, account for more than 90% of total exits per year.

VC-backed M&A exit count by deal size

The top 10 largest acquisitions of VC-backed European tech companies drove an aggregate enterprise value at exit of $12.7B. The top three largest transactions all involved acquisitions of once VC-backed companies by private equity buyers. The acquisition of a majority ownership of Charlotte Tilbury, in a transaction that valued the company at more than $1.2B, by Spanish fashion and beauty giant, Puig, together with the billion-dollar acquisition of Flaschenpost by The Oetker Group, represent important milestones of older European incumbent businesses looking to Europe's VC-backed startup ecosystem for growth and innovation.

Top 10 largest VC-backed exits by value at exit in 2020

The acquisitions of companies like Flaschenpost to a European buyer is in some way not unusual. European buyers actually consistently drive the largest share of exits of European tech companies by M&A, consistently accounting for around 70% or so of exits by count.

The Flaschenpost acquisition by The Oetker Group is remarkable for other reasons. It is simply still an infrequent occurrence to see European buyers acquiring VC-backed European tech companies at such large exit values. In fact, large-ticket acquisitions have been - and continue to be - driven by buyers from the US. While North American buyers have accounted for 22% of M&A exit volume since 2016, those transactions have accounted for a disproportionate share of total exit value (45%), indicating the higher average ticket size of US-led acquisitions.

The trend over time also shows that while North American buyers have accounted for a relatively steady share of M&A exit volume, they have been responsible for a growing share of total exit value over the past five years, though a few larger M&A transactions led by European buyers has shifted the dial back somewhat in 2020.

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04.5

Mergers & Acquisitions

The aggregate value of exits of European tech companies via M&A exceeded $90B by the end of September 2020, on track for the strongest year since 2016.

European M&A exit value per year

The vast majority of exits of VC-backed European tech companies are small in scale. In fact, exits via M&A that are valued at $100M or lower, including those that involve undisclosed exit valuations, account for more than 90% of total exits per year.

VC-backed M&A exit count by deal size

Top 10 largest VC-backed exits by value at exit in 2020

The acquisitions of companies like Flaschenpost to a European buyer is in some way not unusual. European buyers actually consistently drive the largest share of exits of European tech companies by M&A, consistently accounting for around 70% or so of exits by count.

Share of M&A exits by buyer region by year

Share of M&A exits by buyer region, 2016 to 2020

Share of exits by North American buyers