Apollo and John Wood enter talks after final offer; Wendel in negotiations with engineering firm

We start things off with news that the board of John Wood Group is set to engage with Apollo Global Management, which has made a series of offers for the Scottish engineering firm. Next we have news of Wendel Group entering exclusive negotiations to buy another engineering company, this one based in France.

Meanwhile, Polaris has taken a majority stake in a Scandinavian packaging lines supplier and a Palatine portfolio company has bought a cybersecurity firm.

Finally, we look at a London expansion by Apollo and reports of private equity interest in English football team Manchester United.

Acceptance

Apollo Global Management’s pursuit of John Wood Group, a Scottish engineering firm, is moving forward after the Wood board decided to enter discussions with the private equity company after it had made a fifth and final offer.

Apollo made the 240p per share offer in early April, which values the total outstanding equity at £1.66 billion ($2.07 billion; €1.89 billion).

Today it said: “The Board remains confident in Wood’s strategic direction and long-term prospects, following a transformative year in 2022, including new executive leadership and a new strategy. However, having now weighed all relevant factors, particularly feedback received from Wood shareholders, the Board has decided to engage with Apollo to see if a firm offer can be made on the same financial terms as the Final Proposal. Accordingly, the Board will grant Apollo access to due diligence materials.”

Apollo’s final offer is subject to pre-conditions, including the satisfactory completion of due diligence, as well as several reservations, under which Apollo can change its terms.

Apollo is now required to make a firm offer by 17 May.

Wood is a multinational engineering and consulting business that works in sectors including petrochemicals and refining.

Exclusivity

Also entering talks are private equity firm Wendel Group and the Scalian Group, a French engineering consulting company.

Wendel is in exclusive negotiations to buy the firm for an enterprise value of €965 million, according to a statement. As part of the deal, Wendel could invest up to around €550 million along with the management team and could hold a large majority of the company’s capital.

Scalian operates internationally and provides industrial project management services for areas such as supply chain and the development of embedded digital systems. The firm expects to reach €510 million in revenue and adjusted EBITDA of €74 million in June 2023. The company has had annual growth of around 30 percent of revenues since 2015, including nine acquisitions.

“We share the ambition of its leader, Yvan Chabanne, of unlocking the company’s full value creation potential in Europe and North America and making it an international leader in its field,” said Wendel CEO Laurent Mignon in a statement. “Scalian’s highly entrepreneurial culture and its recognised ESG performance are fully in line with Wendel’s values.

“This majority investment by Wendel in an unlisted company will be fully in line with the strategic roadmap we announced a few weeks ago, including the ambition to invest €2 billion over the next twenty-four months.”

The deal is expected to be finalised in the second half of 2023.

Packaging

Polaris has acquired a majority share in Sealing System, a Scandinavian supplier of intralogistics and full-scope automated packaging and palletising lines.

Sealing System is based in Grindsted, Denmark. The company has around 155 employees at its facilities in Denmark, Norway, and Belgium.

Sealing System reported average annual revenue growth of 25 percent since 2019. The company saw revenue of over DKr200 million (€26.84 million; $29.52 million) in 2022 with an EBITDA of DKr20 million, according to a release.

Networks

FourNet, a portfolio company of Palatine Private Equity, has acquired Nowcomm, a cybersecurity, network infrastructure and collaboration consultancy.

Nowcomm is based in Derby, England.

FourNet’s investment in Nowcomm is its second significant strategic acquisition since investment from Palatine in 2021.

Expansion

Apollo Global Management has announced the opening of a new office in London to strengthen its presence in Europe.

Apollo will combine its teams from offices at 10 Portman Square and 25 St George Street into a new location at 1 Soho Place.

Apollo’s new office will serve as an expanded regional hub for Apollo’s European team, in line with the firm’s broader global growth strategy, according to a release.

The move follows the firm’s other recent new or renovated workplaces in Singapore, New York, Greenwich, Mumbai, and Hong Kong, the release added.

For more on private equity firms expanding in London, check out Nina Lindholm’s recent listicle.

Minority interest

And finally, the sports news. Carlyle has a “serious” interest in making a minority stake in English football club Manchester United, according to a source close to the situation spoken to by Sky Sports. The source added that discussions had been taking place between the parties for some time.

The sale of Manchester United has been making headlines in sports news for some time, with several suitors said to be interested.

Private equity firms are no strangers to European football teams, of course. Check out this round-up from PE Hub Europe on some of the deals involving private equity and football over the last few years for more.