DATA AS O F D E C E M B E R 3 1 S T , 2 0 1 9
A VIEW OF 2019: FLORIDA PE DEAL REPORT
THIS INFOGRAPHIC REPORT AND ALL ASSOCIATED CHARTS, PREPARED BY CASSEL SALPETER & CO. WITH DATA FROM PITCHBOOK AS OF DECEMBER 31ST, 2019, 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 2008
160
2009
133
20 10
177
201 1
184
2012
238
2013
213
2014
258
2015
288
2016
276
2017
308
2018
335
2019
298 0
50
100
150
200
250
300
350
As we have noted in prior reports, all data is preliminary as data reporting generally lags behind actual activity. While falling just shy of 2018’s record, Florida PE deals had another healthy showing in 2019, with 298 deals completed. This steady, healthy deal flow is not surprising given prior increased amounts of fundraising and availability of capital.
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% 2008
2009
2010
2011
2012
2013
2014
2015
2016 2017
2018 2019
Southeast Florida remains the region with the most Florida PE deal flow, accounting for approximately 45% of total Florida PE deals. The Tampa Bay and Central regions followed with approximately 21% and 17%, respectively. The Southwest, Northeast, and Panhandle all accounted for less than 10% of total Florida PE deals in 2019.
Florida PE Deal Flow by Quarter
100
97
96
90
85 80
80
87
84
80 75
70 62
60
52
51
50 41
40 33
39
53
54
63
65
67
72 67
65
63 62
78
75
63
54
50
41
38
34
31
30
55
59
75
45
46
43
65
61 60
60
85 81
27
27 22
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
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
With a record-breaking 1Q and 3Q in 2018, where deal counts spiked, 2019 had a much more consistent year overall between quarters. While 4Q on the surface seems to have slowed down somewhat, these numbers are likely currently underreported.
2019
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% 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Since we began tracking this report in 2008, Add-ons have consistently been the dominant type of Florida PE deals, accounting for approximately 54% in 2019. Buyout/LBO and PE Growth/Expansion accounted for approximately 24% and 20%, respectively. Recap and Platform Creation accounted for less than 5% each.
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% 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
B2B was once again the dominate sector of Florida PE deal activity in 2019, accounting for approximately 35%. B2C accounted for approximately 22% of Florida PE deal activity, while Healthcare and IT tied for third with approximately 16%. Financial Services, Materials and Resources, and Energy each accounted for less than 10% of Florida PE deal activity in 2019.
Florida Buyouts vs. Add-ons
71.1%
68.6%
300
70.6% 59.4%
250
53.4%
57.1%
69.1% 64.8%
65.0%
62.3%
69.7% 65.6%
80% 70% 60%
161
168
132
139
102
80
82
50%
0
2008
20%
2009
70
96
75
80
81
58
55
77
60
56
32
61
50
40% 30%
70
70
100
118
150
149
183
200
10% 0%
2010
2011
BUYOUT/LBO
2012
2013
ADD-ON
2014
2015
2016
2017
2018
2019
ADD-ON %
Consistent with prior years, add-ons accounted for the majority of Florida PE control investments in 2019. This makes sense as platforms tend to be larger investments and once acquired the focus shifts to building out that current investment with add-ons.
PE-Backed Florida Companies 700 632 605
600
568 519 493
500 452 419 390
400 351 323 282
300
YEAR OF INVESTMENT
297
252 2013-2019
195
200
100
2006-2012
165
84
97
111
130
143
2000-2005
PRE-2000
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012 2013
2014 2015 2016
2017 2018 2019
Florida PE-backed company inventory continued to grow with an additional 27 new PE-backed Florida companies, an approximate 4.5% increase. PE-backed Florida company inventory acquired between 2013 and 2019 accounted for approximately 82% of total PE-backed Florida company inventory. Surprisingly, inventory acquired between 2000 and 2012 has not been fully depleted and still accounts for approximately 18% of PE-backed Florida companies. As the years continue, we expect this number to continue to decrease.
Florida PE Exits by Type 90
3
80
1
1
2
2
31
26
27
18
5
2
6
28
40
20
4
50
34
60
34
42
70
2016
44
2015
24
33 2014
30
30 2013
41
28 2012
44 31
23
12
2011
15
21
20 10
1
13
30
14
1
0 2008
2009
2010
Corporate Acquisitions
Secondary Buyouts
2017
2018
2019
IPO
Although Corporate Acquisitions had a stronghold in prior years as the primary exit route for Florida PE deals, it seems that recent years have been either pretty even in the distribution or flipped back and forth. In 2019, Secondary Buyouts represented approximately 51% of total Florida PE exits, while Corporate Acquisitions and IPOs represented approximately 45% and 4%, respectively.
Florida-Based PE Firms 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
The number of PE firms with headquarters in Florida continues to grow, with 2019 seeing an additional seven Florida-based PE firms since year-end 2018 and a CAGR of approximately 13% from 2010 through 2019. After a record-breaking increase between 2017 and 2018, the increase in 2019 is more in line with prior years.
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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