DATA AS O F J U N E 3 0 T H , 2 0 2 0
A VIEW OF 1H 2020: FLORIDA PE DEAL REPORT
THIS INFOGRAPHIC REPORT AND ALL ASSOCIATED CHARTS, PREPARED BY CASSEL SALPETER & CO. WITH DATA FROM PITCHBOOK AS OF JUNE 30TH, 2020, PROVIDES A TOP-LEVEL EXAMINATION OF PRIVATE EQUITY ACTIVITY IN FLORIDA. IT OFFERS IN-DEPTH INSIGHT AND DATA-DRIVEN ANALYSIS OF THE STATE’S PE TRENDS, WITH A FOCUS ON DEAL FLOW ACTIVITY. THIS REPORT INCLUDES ALL PE INVESTMENTS (INCLUDING BUYOUT, ADD-ON, GROWTH, AND RECAPITALIZATION), EXCLUDING REAL ESTATE INVESTMENTS, MADE INTO TARGET COMPANIES WITH HEADQUARTERS IN FLORIDA.
Florida PE Deal Flow by Year 2009
133
20 10
180
201 1
187
2012
237
2013
211
2014
258
2015
287
2016
285
2017
326
2018
340
2019
327
1H 2020
133 0
50
100
150
200
250
300
350
As we have noted in prior reports, all data is preliminary as data reported generally lags behind actual activity. Despite the ongoing COVID-19 pandemic, surprisingly, there has been no slowdown in Florida PE deals completed in the first half of 2020. In fact, 1H 2020 even surpassed our initial reported 1H 2019 Florida PE deal count of 127*. *The initial and final reported numbers vary due to a lag in activity reported during the initial report. The final reported 1H 2019 deals, as seen in the PE Deal Flow by Quarter chart, is 172.
Florida PE Deal Flow by Region
100% TA M PA B AY
90% 80%
SOUTHWEST
70% 60%
SOUTHEAST
50% PA N H A N D L E
40% 30%
NORTHEAST
20% 10%
CENTRAL
0% 2009
2010
2011
2012
2013
2014
2015
2016 2017
2018 2019
1H 2020
Southeast Florida remains the region with the most Florida PE deal flow, accounting for approximately 45% of the total Florida PE deals in 1H 2020. The Tampa Bay and Central regions followed with approximately 18% and 14%, respectively. The Southwest accounted for approximately 11%, while the Northeast and the Panhandle both accounted for less than 10% of total Florida PE deals in 2020.
Florida PE Deal Flow by Quarter 100 90
85 80
80
80
82 81
61 59
61 52
51
50
47 41
54 53
50
58
85 80
71
70
67 67
66 60
82
79 71
66
60
30
95 90
76
70
40
95
92
89
62
54
53
53
45 41
41
38
34
31
29
27
20 10 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
1H 2020 started out strong with 80 Florida PE deals completed in 1Q, significantly higher than past data we have seen in initially reported data for 1Q. 2Q 2020 is also in line with previous initial reported data, which is surprising given the unusual circumstances surrounding 2020 and the second quarter. It will be interesting to see if the second half of the year also remains consistent.
1H 2020
Florida PE Deal Flow by Type
100% P L AT F O R M C R E AT I O N
90% 80%
G R O W T H / E X PA N S I O N
70% RECAP
60% 50%
ADD-ON
40% BUYOUT/LBO
30% 20% 10% 0% 2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
1H 2020
Add-ons have consistently been the dominant type of Florida PE deals, accounting for approximately 59% of total Florida PE deals in 1H 2020. Buyout/LBO and Growth/Expansion (i.e. minority) accounted for approximately 22% and 17%, respectively. Platform Creation and Recap each accounted for less than 1% of total Florida PE deals in 1H 2020.
Florida PE Deal Flow by Sector
100% 90%
M AT E R I A L S & RESOURCES
80%
IT
70%
H E A LT H C A R E
60% 50%
FINANCIAL SERVICES
40%
ENERGY
30%
B2C
20%
B2B
10% 0% 2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
1H 2020
While B2B remained the dominant sector for Florida PE deals, its margin has narrowed compared to previous years. This is the first time, since we began tracking Florida PE deals, that B2B has accounted for less than 30% of total Florida PE deals. The Healthcare and IT sectors also made a big jump and both surpassed B2C in 1H 2020, accounting for approximately 23% and 20%, respectively. B2C accounted for approximately 17%, while the Financial Services, Materials and Resources, and Energy sectors each accounted for less than 10% of total Florida PE deals.
Florida Buyouts vs. Add-ons
300
70.6%
68.6%
66.9% 60.3%
250
57.7%
69.0% 64.8%
67.0%
69.5%
73.1%
62.2%
80% 70%
60.5%
2009
178
178
138
139
103
40%
79
30%
2011
2012
BUYOUT/LBO
2013
2014
ADD-ON
78
94
80
84
81
58
51
77
60
56 2010
2015
2016
2017
2018
2019
20% 10%
29
0
32
50
50%
70
100
82
85
118
150
149
200
191
60%
0%
1H 2020
ADD-ON %
In 1H 2020, Add-ons accounted for approximately 73% of all control investments, a slight increase over recent years. As we have seen in prior reports, the first half of the year sees a higher percentage of Add-ons, and then ultimately levels out around mid-to-high 60% by year end. It will be interesting to see if COVID-19 plays any role in causing Florida PE firms to focus more on building out platforms in their portfolio rather than making large investments into new businesses.
PE-Backed Florida Companies 600
515
525
484
500 454 409
400
386 361 328
340
298
300 254
259
283
YEAR OF INVESTMENT
227 2014-1H 2020
200
178
2007-2013
146
100
77
90
101
116
128
2000-2006
PRE-2000
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012 2013
2014 2015 2016
2017 2018 2019
1H 2020
PE-backed Florida company inventory stayed pretty steady in 1H 2020, with only a slight increase of 1.9% from year-end 2019. The aging company inventory acquired between 2007 and 2013 is currently at approximately 17%, with the majority (approximately 80%) acquired between 2014 and 1H 2020. 1H 2020 PE-backed Florida company inventory saw a significant decrease from our previously reported year-end 2019 where there was a total of 632 PE-backed Florida companies.
Florida PE Exits by Type 90 2
3
80
3
2
26 17
28
5
23
40
32
6
50
32
4
2
35
3
37
60
35
70
9
15
10
2016
49
2015
32
2014
32
33
2013
39
30
2012
44 28
2011
22
31
12
12 21
20 10
1
14
1
30
0 2008
2009
2010
Corporate Acquisitions
Secondary Buyouts
2017
2018
2019
1H 2020
IPO
Corporate Acquisitions and Secondary Buyouts were fairly even in choice of exit route in 1H 2020, consistent with 2019. As seen in previous reports, this data seems to be consistent in its inconsistency of flipping back and forth between the primary exit route for Florida PE deals.
Florida-Based PE Firms 90
88 80
79 70
72
60
56 50
47 40
41 37
30
27
30
32
34
20
10
0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
1H 2020
The number of PE firms with headquarters in Florida saw another significant increase in 1H 2020, with an additional 9 Florida-based PE firms since year-end 2019 and a CAGR of approximately 13% from 2010 through 1H 2020. This increase is similar to the jump we saw in 2018; it will be interesting to see the final number of PE firms with headquarters in Florida at year-end 2020.
METHODOLOGY
PRIVATE EQUITY DEALS This report includes all PE investments (buyout, growth, recapitalization, and add-on), excluding real estate investments, made into target companies, with headquarters in Florida. Only investments made directly by private equity firms or their portfolio companies are counted. Buyout deals are defined as transactions in which the PE investors receive controlling ownership stakes in the target companies. Growth deals are defined as minority investments in target companies. Add-on deals are defined as acquisitions by companies with private equity backing.
FLORIDA-BASED PRIVATE EQUITY FIRMS
PE-BACKED FLORIDA-BASED COMPANIES
This report includes PE firms with headquarters in Florida that were either actively investing or raising funds during the reported periods.
This report includes companies headquartered in Florida that are in part or in whole backed by PE firms.
Cassel Salpeter & Co. is a boutique investment banking firm focused on providing independent and objective advice to middle market and emerging growth companies.
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