We have a lot to cover in today’s newsletter. This week we saw some interesting deals in the business and financial services sectors. Hunter Point Capital picked up a minority stake in Coller Capital and KKR invested in a communications consultancy. There is also a potential exit on the horizon, as Bridgepoint is reportedly prepping to sell its stake in French insurer Kereis.
There is also take-private news from Blackstone and EQT, and a potential IPO for Apollo-owned Lottomatica.
We also have some comments from an M&A lawyer regarding the state of PE deals in the UK and a round-up piece about the education sector.
Secondaries
Let’s kick off with one of the deals. Hunter Point Capital made a strategic minority investment in Coller Capital, an independent investor focused on the private capital secondaries market. All proceeds from the transaction will be reinvested into Coller funds.
London-headquartered Coller’s recent funds include Coller Credit Opportunities I, which closed in February 2022 with committed capital of approximately $1.5 billion. At the start of April, the firm held a first close of its Coller Capital Secondaries RMB I Fund.
The investment has no effect on Coller’s governance, investment processes or day-to-day management.
Booming
Staying with the UK for a moment longer. While big take-privates have been a common topic in the Dealflow lately, research from UK investment bank Peel Hunt found that bid activity in the UK has mainly focused on the smaller end of the market.
The total number of bids for UK firms fell by over a quarter on the same period last year with just 11 new firm offers made to buy UK listed companies, according to Peel Hunt’s UK M&A report for Q1 2023.
Regardless of these numbers, Nathan Lightman, a senior associate at law firm Charles Russell Speechlys, argued the UK PE industry remains strong. “Even without current concerns about a banking crisis, PE would still be booming,” said Lightman. “The industry’s long-term investment focus, active management approach, and ability to identify and capitalise on emerging market opportunities mean that it is perfectly positioned to continue generating strong returns over the long term.”
“The UK private equity industry has remained as strong as ever, even in light of concerns over the resilience of several major banks,” he added. “At the top end of the market, major takeovers which have fallen through this year have been hoovered up by PE, and at the mid and lower end, 90 percent of UK companies receiving private investment were SMEs (according to BVCA data).”
Takeover
Speaking of take-privates, we have some news on that front. The board of Dechra, a London-listed UK veterinary pharmaceuticals company, confirmed it is in talks with private equity firm EQT over an all-cash take-private offer.
Shareholders would receive £40.70 per share, which, given that Dechra has just under 114 million of shares outstanding, would value the total equity at around £4.6 billion ($5.8 billion; €5.2 billion).
The Dechra board said that if EQT makes a firm offer, it is prepared to recommend the bid. A possible co-investment from the private equities investment department of the Abu Dhabi Investment Authority is also being discussed.
Dechra’s share price was about £27 before the offer was announced. It has traded between £25 and £32 so far this year.
BofA Securities and Morgan Stanley are joint financial advisers to EQT.
Agreement
Elsewhere in take-private news, the board of Industrials REIT, a UK property company listed on the London Stock Exchange, has agreed a recommended cash acquisition with Blackstone.
The price is 168p per share, which values the company’s outstanding stock at £511 million ($640 million; €579 million), although as PE Hub Europe previously reported, we understand that the total enterprise value, including debt, is around £700 million. Check out that previous coverage for details on the premium and some of Industrial REIT’s financials.
Ticking up
Finally on take-private news, Triton Partners is now the largest shareholder in Finnish construction firm Caverion. It controls 24.3 percent and has conditional purchases for further shares that will take it up to 29.9 percent. Check out yesterday’s Dealflow for more on that story.
Going public
Potentially moving in the other direction, Apollo Global Management-owned Italian gambling company Lottomatica has said that it is aiming to launch an IPO in Milan before the end of this month. The sale will include new and existing shares, with the gross proceeds from the new shares aimed to raise €425 million. Proceeds will be used to pay down debt.
We’ve asked Apollo for comment.
The European IPO market has been pretty quiet this year, although there are some signs of life – check out yesterday’s Dealflow for more.
Communications
Back to deals from earlier in the week now. KKR announced a growth investment in FGS Global, a global strategic advisory and communications consultancy.
WPP, a public relations company based in London, will remain the majority owner of the company, and FGS Global employees will remain substantial shareholders, according to a release.
“Stakeholder engagement is a boardroom issue, and we are today establishing a powerful strategic partnership between WPP and KKR to support FGS Global as they continue on their path to building an industry-defining global business,” said Philipp Freise, partner at KKR.
Golden Gate Capital, a shareholder in FGS Global since 2016, will exit its investment via the sale of its interest to KKR.
Insurance
Bridgepoint Group is preparing to sell its majority stake in French insurance broker Kereis, sources familiar with the matter told Reuters.
The deal could value the company in the region of €2 billion, according to the sources.
Bridgepoint acquired a majority stake in Paris-based Kereis, formerly CEP, in 2020.
(Note: Bridgepoint owns PEI Group, the publisher of PE Hub Europe.)
Back to school
Lastly, we have a big bunch of deals in the education sector. My colleague Irien Joseph has written a round-up of recent deals in the segment. Her list includes firms such as KKR, BC Partners and Dominus Capital.
Irien noted a pickup especially in online learning services and technical education companies. You can read her full story here.
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