9M24 European Direct Lender Rankings
Deepening appetite for leveraged buyouts drives surge in direct-lending deal volume in 9M24
The number of European direct-lending deals inked during the first nine months of this year rose by 62% year-on-year, emblematic of a resurgent M&A market driven by revived conviction among buyout groups.
Over the first three quarters of 2024, some 719 new deals were signed, compared to a three-year average of 640 for the same period, according to Debtwire’s 9M24 European Direct Lender Rankings Report.
Evidencing financial sponsors’ deepening appetite for leveraged buyouts (LBOs) was the use of proceeds from direct lending deals.
More than a third of year-to-date proceeds were allocated to LBOs, according to Debtwire’s report, compared with less than 10% of high-yield bonds and leveraged loans – demonstrating direct lenders’ dominant positions when it came to financing new platform acquisitions for private equity firms.
One transaction financed by direct lenders in 3Q24 entered the top 15 largest European direct-lending deals on record.
The GBP 1.75bn unitranche supplied to Hargreaves Lansdown by KKR Credit, Apollo Global Management, HPS Investment Partners, and Blackstone Credit to fund a GBP 5.4bn take-private by a consortium comprising CVC Capital Partners, Nordic Capital and Platinum Ivy. It is the sixth-largest European direct-lending deal on record.
The average margin on direct lending facilities was 560bps over the reference rate in 3Q24, while average net leverage stood at 5.2x, Debtwire’s report shows.
Sliding down the capital structure from senior secured to junior debt, a noticeable uptick in the number of jumbo payment-in-kind (PIK) facilities has been witnessed.
Last month, Debtwire revealed that Goldman Sachs Asset Management was expected to lead a club of direct lenders providing a EUR 1.5bn PIK note to part-finance Clayton, Dubilier & Rice’s acquisition of a controlling 50% stake in Sanofi’s consumer healthcare unit, the largest European leveraged buyout of this year.
Meanwhile, Goldman Sachs was also expected to take the lead last month on a USD 1bn-plus PIK-financing deal with Nord Anglia, after a new ownership structure was announced following a minority investment from Neuberger Berman that valued the international school operator at USD 14.5bn.
9M24 European Direct Lender Rankings
Ares Management topped Debtwire’s 9M24 Europe-wide direct lender rankings with a market share of 5.31% from 25 deals, factoring for senior and subordinated transactions, while excluding add-ons. In joint-second place were Blackstone Credit and Muzinich & Co, each with 22 deals and a 4.67% market share, followed by Goldman Sachs and Pemberton in joint-fourth place, with 21 transactions each and a 4.46% market share.
When factoring for add-ons, Ares again took the top slot, with 55 deals and a subsequent market share of 7.55%. Behind Ares was Eurazeo, with 38 transactions that gave the lender a market share of 5.22%. In third place was Goldman Sachs, with a market share of 4.40% from 32 deals.
In the large-cap arena, Goldman Sachs came out on top, with 16 deals giving the direct lender a 24.24% market share in this size bracket. In second place was Apollo Global Management, with 13 deals and a market share of 19.70%. Blackstone Credit took the third slot, with an 18.18% market share derived from 12 deals in total.
Meanwhile in the mid-market, factoring for senior and subordinated deals while excluding add-ons, Ares took first place, with 18 deals and a market share of 10.40%. In second place was Pemberton, with a market share of 8.67% from 15 deals. In third place was Muzinich & Co, with 14 deals and a market share of 8.09%.
Finally, in the small-cap rankings, factoring for senior and subordinated transactions while excluding add-ons, CVI was in first place, with 11 deals and a market share of 10.28%. In second place was Fiduciam, with a market share of 8.41% from nine deals. And in joint-third place were HF Private Debt and Investec Private Debt, each having inked eight deals, giving them an individual market share of 7.48%.
For further segmented insights into direct-lending deals, continue reading Debtwire’s 9M24 European Direct Lender Rankings report.