DATA AS OF DECEMBER 31ST, 2020
A VIEW OF 2020: FLORIDA PE DEAL REPORT
THIS INFOGRAPHIC REPORT AND ALL ASSOCIATED CHARTS, PREPARED BY CASSEL SALPETER & CO. WITH DATA FROM PITCHBOOK AS OF DECEMBER 31ST, 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
131
20 10
175
201 1
181
2012
232
2013
204
2014
253
2015
283
2016
281
2017
333
2018
342
2019
341
2020
330 0
50
100
150
200
250
300
350
Despite so many unknowns and changes in 2020 with the COVID-19 pandemic, the year ended fairly consistently with years past in terms of Florida PE deal activity. This is somewhat surprising given the slowdown of deal activity in the second and third quarter, as seen in our Florida PE Deal Flow by Quarter chart.
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 2020
While the Southeast remains the region with the most Florida PE deal flow, accounting for approximately 38% in 2020, this percentage has decreased slightly from 2019, where the Southeast accounted for approximately 45%. The Tampa Bay, Central, Southwest, and Northeast regions followed accounting for approximately 22%, 18%, 11%, and 8%, respectively. The Panhandle trailed the group, accounting for approximately 3% of Florida PE deals in 2020.
Florida PE Deal Flow by Quarter 120
112
110 100 90
65 60 50
47
50 41
50 44
39
40
59 53 53 48
39
59
63
92 87
82 84 72
68 67
76
88
85 77
73
69 61
59
54 53
38
34
31
51
56
94
77
70 60
87
84
81
78
80
30
99
95
27
25
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 3Q 4Q
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Given the tumultuous beginning of 2020 due to the COVID-19 pandemic, Florida PE deal-making bounced backed in the last quarter to finish out the year on a historically high note. With what seemed like a rollercoaster in the first half of 2020, with the freefall of Q2, the rebound in Q4 is the highest number of deals we have seen in any quarter thus far.
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
2020
As we have seen in prior years, Add-On’s propelled Florida deal activity in 2020. This buy-and-build strategy to augment larger platforms was only accelerated by the pandemic. In 2020, Add-On’s accounted for approximately 54% of total Florida PE deals. Buy-Outs and PE Growth/Expansion followed accounting for approximately 28% and 17%, respectively. Both Platform Creation and Leveraged Recapitalization accounted for less than 1% of total Florida PE deals.
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
2020
The COVID-19 pandemic shined a light on PE firms’ investments, both in Florida and globally, in both IT and Healthcare sectors, as stay-at-home orders pushed the accelerated adoption of digital platforms for workforces, education, healthcare, and entertainment. While B2B remained the top sector for Florida PE deal activity, accounting for approximately 34%, the Healthcare and IT sectors made a huge jump in percentage, accounting for approximately 22% and 16%, respectively, of total Florida PE deals in 2020. By contrast, the B2C sector plunged and had the largest drop in percentage of total Florida PE deals, dropping from approximately 21% in 2019 to approximately 14% in 2020.
Florida Buyouts vs. Add-ons
300
70.8%
69.4%
66.7%
68.3%
71.4%
80% 65.7%
61.1%
61.9%
60.6%
250
69.8%
66.7%
70%
56.5%
0
2009
178
192
136
180
50% 40%
98
30%
77
90
78
86
75
56
49
72
60
54
93
20%
68 30
50
83
100
78
117
150
135
150
200
194
60%
10% 0%
2010
2011
2012
BUYOUT/LBO
2013
2014
ADD-ON
2015
2016
2017
2018
2019
2020
ADD-ON %
As discussed previously in our report, Add-On’s, similar to previous years, propelled Florida PE deal activity and accounted for the majority of Florida PE control investments in 2020. In 2020, Add-On’s accounted for approximately 66% of all Florida PE control investments. With an uncertain economy and the pandemic looming, Florida PE firms likely felt making acquisitions to support existing portfolio companies was safer than buying new entities.
PE-Backed Florida Companies 600 532 489 469
500
441 389 363
400 314 273
300
324
342
290
246 252
YEAR OF INVESTMENT
218
167
200
71
82
93
107
119
2014-2020
136
2007-2013 2000-2006
100
PRE-2000
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012
2013 2014 2015 2016
2017 2018 2019 2020
Florida PE-backed company inventory continued to grow with an additional 43 new PE-backed Florida companies. Most interesting is that Florida PE-backed company inventory acquired between 2007 and 2013 accounted for a diminished proportion of exit activity as compared to previous years. It is likely that given the state of the economy and the COVID-19 pandemic, many PE firms decided to delay exits and ultimately have a longer holding period for some of their assets.
Florida PE Exits by Type 90 2 3
80
3
33
70
30
33
33
30
26
15
43
52
24
2013
32
30
2012
39
28
2011
34
25
30
22
12 15
10
1
34
30
14
5
21
6
40
20
2
3
50
37
3
60
2
0 2009
2010
Corporate Acquisitions
2014
2015
Secondary Buyouts
2016
2017
2018
2019
2020
IPO
With the banner year that IPO’s and SPAC’s had globally in 2020, it is surprising not to see it reflected in our Florida PE data. The primary exit route for Florida PE deals in 2020 was secondary buyouts, which reverses the trend in which corporate acquisitions became more popular of an exit option.
Florida-Based PE Firms 100
95
90
79
80
72 70
60
56 47
50
41 40
30
27
30
32
34
37
20
10
0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Not surprisingly, the number of PE firms with headquarters in Florida skyrocketed, with an additional 16 Florida-based PE firms since year-end 2019. With COVID-19 forcing everyone to work from home, we saw many businesses, including PE firms, relocate to Florida.
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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