Bain Capital to buy infra biz Eleda, Altor retains minority stake

Healthcare pipeline healthy, says Hillhouse.

As the world digests an agreement from the COP28 climate change summit calling for a transition away from fossil fuels in energy systems, we have a deal in the renewable energy sector. Bain Capital is taking a controlling stake in infrastructure company Eleda, with Altor Equity Partners retaining a minority share. We’ve got details including the enterprise value on that one for you.

Next, we look at the pipeline for healthcare deals in 2024 as Nina Lindholm speaks to Hillhouse’s Marcel Lacaze in the latest of our 2024 outlook series.

We then finish with take-private news as a Five Elms Capital-backed space management company makes a play for a UK business.

Infra play

Renewable energy is making headlines this morning, after nearly 200 countries at the COP28 climate change conference in Dubai approved a text calling for “transitioning away from fossil fuels in energy systems”, the first time the phrase ‘fossil fuels’ had appeared in a COP agreement.

That made Bain Capital’s latest deal announcement pretty timely, as this morning it said it had agreed to acquire a controlling stake in Eleda, a Swedish infrastructure projects and service provider, from Altor Equity Partners.

The deal values Eleda at about €1.5 billion, including debt, according to people familiar with the matter. Altor will retain a minority stake.

“Eleda is on the right side of history with a business driven by sustainability trends like electrification, renewable energy, water preservation and more,” said Ivano Sessa, a partner and head of industrials at Bain Capital, in a statement.

Altor formed Eleda in April 2020 through the merger of three infrastructure services platforms. Eleda had a turnover of around Skr6 billion ($573 million; €532 million) at the time of the merger. It has over SKr15 billion in revenues now, having had organic growth of over 10 percent per year and made 19 acquisitions.

“There is great competence in Eleda, and the market for its services is growing strongly throughout Europe,” said Bengt Maunsbach, partner at Altor. “It is natural that Altor is now making a partial sale, as the value of Eleda today is almost as large as the entire Altor fund.”

Altor created Eleda via its Fund V, which closed at €2.5 billion in 2019, according to PE Hub Europe data.

It’s been a busy week for infrastructure. Investcorp took a 50 percent stake in Corsair’s infrastructure business, for instance.

Healthy pipeline

Switching sectors now and the outlook for healthcare opportunities in 2024 looks promising, Hillhouse managing director Marcel Lacaze told PE Hub Europe’s Nina Lindholm in the latest of our outlook Q&A series.

Here’s some highlights from the interview:

How do you expect the first six months of PE dealmaking in 2024 to compare with the last six months of 2023?

The European healthcare sector slowed down noticeably in 2023, largely in response to a more challenging financing environment and some post-covid adjustments. Though PE firms were under pressure to deploy, many deal processes stalled or failed.

Over the past 12 months, many healthcare companies have continued to re-adjust to reality post-pandemic. Following a period of unusually high profits and subsequent investment during the pandemic, the sharp decline in investment volumes and a tightening macroeconomic backdrop since have presented challenges to certain sub-sectors, including CROs, CDMOs and biotechs.

However, 2024 presents a brighter picture. Though buyer-seller expectations on price are still adjusting slightly, financing conditions are stabilising, and we expect to see many high-quality companies, previously on pause for the right moment, gearing up for sale. The chatter in the market from GPs, bankers and strategics is more optimistic and from our perspective, the pipeline for European healthcare in 2024 looks promising.

What will be the most important trends affecting your healthcare dealmaking in 2024?

When considering investment opportunities in 2024, it is important to keep in mind that the period of market normalisation post covid-19 is ongoing. We will continue to see a shake-out of certain sub-sectors, companies that may have overinvested in certain areas during the pandemic, as well as those which have suffered from the impact of the contraction in biotech ventures and IPO funding.

However, there are multiple macro and thematic trends that give us cause for optimism in 2024. For example, the growing complexity of next-generation therapeutics, the globalisation of drug development, a continued shift towards outsourcing from biopharma, and an uptick in outbound healthcare activity from Asia, are all creating favourable tailwinds for dealmaking. Given our deep sector expertise and global network, Hillhouse is well-positioned to take advantage of these trends.

Check out the full interview for more on Lacaze’s outlook for next year.

Looking for space

Skedda, a global space management company based in Australia and backed by growth equity firm Five Elms Capital, is making a take-private offer for SmartSpace Software.

The SmartSpace board said this morning that it had received an unsolicited condition offer of 82p per share from Skedda, having earlier rejected a lower price. That would value the total equity at around £25 million ($31.3 million; €29.1 million). The board said it was considering the proposal.

SmartSpace’s share price jumped from 33.5p yesterday to 71.5p this morning.

SmartSpace makes space management software and has offices in the UK, US and New Zealand.

Five Elms made a growth investment in Skedda last year.