The UK is attracting heavy interest from private equity companies, with Apollo adding to a list of potential take-privates by making an offer for ecommerce firm THG. We also look at Italian Design Brands, a company owned by Private Equity Partners, as it looks to move in the other direction with an IPO – an exit route that has been all but closed for private equity firms this year.
In confirmed deals, we have Polaris buying a Nordic IT consulting firm, an Abris-backed portfolio company acquiring a parcel services provider and Oakley Capital making a play in education.
Ecommerce
Another day, another take-private offer for a UK firm. This time, the board of ecommerce company THG – formerly known as The Hut Group – said it was “in receipt of a highly preliminary and non-binding indicative proposal from Apollo Global Management”.
There was no info on the size of the bid, but THG’s share price jumped from about 70p to 95p when the board made the announcement on Monday morning. The share price had dropped to 88.53p at the time of writing on Tuesday morning, giving it a market cap of about £1.15 billion ($1.43 billion; €1.30 billion). THG only listed less than three years ago, when its IPO raised £1.88 billion in September 2020.
THG released its preliminary results for the year ending 31 December on Tuesday morning. Gross revenue was £2.2 billion, up 2.7 percent year-on-year and up 38.8 percent on two years ago. Adjusted EBITDA was £64.1 million, down from £161.3 million in the previous year.
Apollo must now make a firm intention or drop its interest by the close of the market on 15 May.
Jefferies International is acting exclusively for THG.
This is the latest in a flurry of take-private attempts for UK companies. Yesterday, we covered another move by Apollo, this time for engineering firm John Wood Group. The two companies have entered talks.
Other UK take-private attempts by private equity companies include EQT being in talks with veterinary pharmaceuticals company Dechra, Blackstone looking to buy Industrials REIT, and Providence Equity Partners and Searchlight Capital Partners entering talks with conference organiser Hyve Group. Network International, a payments company headquartered in Dubai but listed in London, is also the subject of an offer from CVC Capital and Francisco Partners.
I’ll be writing a feature on why we’re seeing such a glut of take-privates – and whether the trend will continue. If you’d like to contribute, drop me a note at craig.m@pei.group or reach me on LinkedIn here.
IPOs
Moving the other way, and Italian Design Brands, a furniture and design company founded in 2015 by Private Equity Partners, a Milan-headquartered private equity firm, is planning an IPO.
The offering, on Euronext Milan, will include €70 million of newly issued shares and existing ordinary shares which, combined, will allow the company to reach a free float of at least 25 percent of the share capital resulting from the listing.
Investors in not just Italy but across Europe will likely follow the listing closely. The IPO market has been very quiet so far this year, blocking off one traditional exit route for private equity firms. That said, the Italian market has been busier than most.
Gambling company Lottomatica – owned by Apollo (them again!) – is planning a Milan IPO before the end of the month.
One of the first private equity IPO exits this year was also in Italy, when Tikehau Capital listed EuroGroup Laminations, a producer of stators and rotors for electric motors. Tikehau’s Roberto Quagliuolo, head of private equity Italy and co-head of Italy, told us that the time however that that deal was not necessarily a sign that the IPO market was fully reopening.
EuroGroup listed at €5.50 in February, but at time of writing its share price was €5.06.
Consulting
Polaris announced that it has concluded the management buyout of a Microsoft Dynamics consulting business.
The acquired business will be relaunched under the new brand name, Cepheo, with around 400 employees, according to a release.
Cepheo is a provider of Microsoft Dynamics in Scandinavia and is located at 11 offices in Denmark, Norway, Sweden and Poland.
“The industry outlook is strong, and our partnership is well-positioned for profitable growth and market share expansion as a strong and focused stand-alone business,” said Allan Bach Pedersen, partner at Polaris.
This is Polaris’ second platform investment in April following the acquisition of Sealing System.
Parcel services
Alsendo, backed by Abris Capital Partners, has acquired Ecolet, a B2X focused parcel services platform in Romania and Bulgaria.
Alsendo’s acquisition of Ecolet will support its international expansion and an immediate footprint in the Romanian and Bulgarian parcel services markets, according to a release.
The transaction follows Alsendo’s earlier domestic bolt-ons, as well as more sizeable add-ons of: Sendit in 2021, Zaslat in 2022 and Innoship in 2022.
Abris Capital acquired majority stake in Alsendo in 2020.
“This is the latest step in Alsendo’s strategy to build the largest tech-enabled delivery management solutions provider in Central Europe, as we drive international growth and value creation through buy and build,” said Edgar Kolesnik, partner at Abris Capital.
For more on the private equity investing landscape in central and eastern Europe, check out my interview with Michal Rybovič, partner at Sandberg Capital.
Education
Oakley Capital has entered a strategic partnership to provide capital to Thomas’s London Day Schools, a family run group of co-educational independent schools.
Thomas’s is based in London, UK.
Oakley’s investment will help fund capex and development projects across the Thomas’s schools, according to a release.
The Thomas family will remain majority owners in full control of the company and Oakley will take a minority stake, the release added.
Oakley’s investment in Thomas’s is its eighth investment in the education sector.
For more on recent private equity education deals, check out Irien Joseph’s roundup article.
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