Tech, a sector that this year has seen everything from large enterprise software deals to niche apps, is in focus this morning. We kick off our series of 2024 outlook Q&As with dealmakers with BC Partners, as PE Hub Europe’s Craig McGlashan speaks to Mark Fariborz about his expectations for 2024, including his “bullish” view on sponsor-to-sponsor activity next year.
We then move to a fresh tech deal, with Keensight Capital and CVC Partners agreeing to invest together in a software provider for infrastructure, construction, and property management professionals.
To finish, we move away from tech to a sector that has been creeping back since the pandemic. Equistone Partners Europe is selling a French tourism group to Abi Dhabi-based tourism and leisure company ADNEC Group.
PE Hub Europe is running a series of Q&As with dealmakers to hear their thoughts about the past year and outlook for 2024. We start our series this morning with BC Partners, as Craig McGlashan caught up with Mark Fariborz, partner and member of the management committee, for his expectations for the next year. Here’s a snippet from the story:
What’s your outlook for exits in 2024?
I do expect a pickup in IPO activity in the coming year, but this comes from the very low levels we’re currently seeing.
However, in terms of unlocking the current ‘logjam’ of deals in the tech sector, my own view is that financial and strategic sales will be key to driving activity in the market much more so than IPOs. Recent IPOs brought to market have not performed well and so I’m not sure how constructive sentiment will be, notwithstanding the recent tick-up in IPO filings.
I also think that sponsors are increasingly weary of how long it takes to fully exit via the public markets and the volatility experienced along the way. The spate of unsuccessful IPOs from the 2020 and 2021 timeframe really brought home this lesson.
Given this, I’m much more bullish that sponsor-to-sponsor activity will pick up in 2024. I also think that you’ll see an uptick in strategic deals heading into next year. There have been some quite large deals this past year like Cisco/Splunk and Nasdaq/Adenza but I think you’ll see the return of more of the regular $1 billion to $3 billion deals next year.
I recommend reading the full story, which covers Fariborz’s outlook on take-privates, the state of dealmaking next year and sectors he expects to do well. You can find the piece here.
I recently caught up with Partners Group’s Charles Rees, member of management, private equity technology industry vertical, about the firm’s exit from Civica, a cloud software services provider to the public sector. Rees echoed Fariborz’s thoughts on potential sponsor-to-sponsor activity, as Partners Group expects a flurry of software assets to enter the market next year. You can read my story here.
Sticking with our technology theme a little longer, CVC Capital Partners has joined Keensight Capital in its investment in Sogelink, a French software provider for the infrastructure, construction and property management sectors.
The enterprise value was over €1 billion, PE Hub Europe understands.
Sogelink has revenue of more than €120 million and EBITDA of €50 million, according to a statement. It employs over 600 people in six countries, has over 18,000 blue chip customers and has 220,000 users.
Keensight made a majority investment in the Lyon-based company in 2019 alongside Naxicap Partners. It has had double-digit revenue growth via organic means and also via M&A, including the acquisition of Regeldienst, a Dutch software company, in October.
Sogelink’s “leading position and pan-European reach set it up well for further organic and non-organic growth”, said John Clark and Jean-Christophe Germani, managing partners at CVC, in a statement.
GPs opting to reinvest in portfolio companies alongside other private equity buyers has been a big trend this year.
That’s enough of tech this morning, let’s move over to travel. Equistone Partners Europe is selling Karavel, a French tourism group, in a strategic sale to Abi Dhabi-based tourism and leisure company ADNEC Group.
Karavel is one of France’s largest tourism groups, according to a statement. It sells travel packages to Europe, the Middle East and Africa.
Equistone has held Karavel since 2018, including during the covid pandemic.
“After providing the company with the necessary resources it needed during the covid-19 pandemic to assure its developments, the group is now ready to take a decisive new step in its development,” said Guillaume Jacqueau, managing partner and country head for France at Equistone, in the statement. “Thanks to our ongoing support, Karavel has enjoyed a remarkable turnaround, evolving into a dynamic group with promising international potential.”
In other tourism news this morning, Three Hills has made a further investment into a French hotel company.