The Pipeline Explorer is a column discussing likely sponsor and VC exit transactions based on Mergermarket’s Likely to Exit (LTE) and Likely VC Exits predictive algorithms, respectively. Based on a number of key industry, holding behaviour, and deal flow criteria, the algorithms assign a score to each exit opportunity, with a higher score corresponding to a higher likelihood of an imminent transaction. Find out more about LTE scores here.

On your marks… The Iberian private equity (PE) scene is waiting for a glut of exits with bated breath.

“We are very close to the point where the expectations of the buyside and the sellside converge,” said Íñigo del Val, Madrid-based partner for Allen & Overy and head of its corporate and M&A practice.

There is liquidity available, which makes it easier to reach reasonable multiples, del Val said. “I’m very optimistic. We think 2H24 and 2025 will be very active.”

Abundant exits would be a welcome change for the Iberian PE market after a disappointing 2023. There were just 46 exits worth a total of EUR 5.6bn last year, according to Mergermarket data.

Every other year since 2016 has seen total exit values make it into double figures in terms of billions of euros. The record year in this period was 2021, which saw EUR 24bn in exits across 74 deals.

The good news for dealmakers is that the mood is already beginning to change, even before a surfeit of exits comes down the pipeline. Portugal-based software-centric platform provider Vision-Box is an example of a recent exit – Keensight Capital sold it to Amadeus [BME:AMS] of Spain for EUR 320m in January.

Deals like this mean that the total volume of exits this year to date has already pushed ahead of the full-year results for 2023, with nine exits worth EUR 6.2bn having taken place.

“There are various exit processes under way in the Spanish market that have managed to fly beneath the radar,” del Val said, adding that confidentiality is a key value.

However, the deals that are coming to fruition tend to be less formulaic than exits in boom years. “Exits are increasingly becoming less standardized and more tailored to the company, probably due to the general turbulence in the markets,” del Val said, adding that open and public processes with fixed dates for binding offers are no longer the norm.

One name to watch is Citri&Co, a producer of lemons, backed by Miura Partners. It has an LTE score of 65 out of 100 following news that its sponsor has begun mandating advisors for a sale.

Meanwhile, VC-backed SpliceBio, which is developing gene therapies, is also inching closer to the market. It has a Likely VC Exit score of 64, which largely reflects the exits track record of its management.

In terms of the broader picture for M&A, quarterly deal volumes and the number of deals both soared between 3Q20, as vaccines for COVID-19 inched toward the finishing line, and 2Q22, when the Russian invasion of Ukraine put the global economy in a spin.