Good morning Eurohubsters, Nina Lindholm here with the first Dealflow of the week.
I hope you had a good weekend. As I mentioned on Friday’s Dealflow, I attended couple of events in London last week. As a result, I spent my weekend recovering from my trip, by mostly reading on the sofa. London seems like the place to be, however, if you ask Blackstone.
In London Town. Over the weekend, Blackstone announced it had reached an agreement to establish purpose-built, European headquarters in its long-term London home, Berkeley Square.
The New York-based firm has been an investor in Europe for more than two decades, across its private equity, real estate, infrastructure, tactical opportunities, growth and credit businesses.
In late July, the firm announced an investment in Dutch rooftop solar hardware specialists, Esdec Solar Group. Other recent European investments include Bourne Leisure, Mileway Logistics and Sage Homes.
Blackstone continues to operate other European offices in Dublin, Frankfurt, Luxembourg, Milan and Paris.
In London, the firm’s headcount has doubled over the past three years, standing at over 500 people at present. Blackstone has invested more than $27 billion across 88 businesses headquartered across the UK over the past 20 years.
The agreement will see Blackstone occupy a 226,000-square-foot, 10-storey building on Berkeley Square. Construction is expected to be completed by 2028.
“It is a source of great pride that Blackstone has been one of the largest foreign investors into the UK since we moved to Berkeley Square over 20 years ago,” said Stephen Schwarzman, chair, CEO and co-founder of Blackstone. “I am delighted to announce our plans to stay on the square and occupy the redeveloped Lansdowne House, providing our people with the platform to continue investing in the industries of the future and building great companies across Europe.”
We’ve spoken a lot about the influx of private equity knowledge and expertise coming into London. If you’re interested, you can read some of that coverage here.
On the ball. Sport is definitely a recurring theme in this newsletter. According to research by law firm RPC, value of M&A and major stakebuilding in the sports industry has increased 433 percent in the last year, rising from £1.8 billion ($1.9 billion; €2 billion) last year to £9.6 billion.
The research also shows that the total number of deals into the sports industry has increased 28 percent, from 29 to 37 in the past 12 months. Of these, 24 were M&A deals. The value of global sport broadcasting rights increased 16 percent, to $52.1 billion in 2021.
In late July, we reported on Sixth Street’s increased stake in FC Barcelona’s LaLiga broadcasting rights.
“Investors in the sports industry view many sports, leagues and individual teams as being commercially underdeveloped and ripe for growth,” said Josh Charalambous, senior associate at RPC. “This presents the opportunity for institutions like PE houses to use their expertise to significantly enhance a club’s business model and transform the businesses’ long-term returns.”
According to Charalambous, this is a balancing act, as it requires investors to achieve that without alienating the core, traditional fanbase of that sport or club. “After the backlash against the European Super League, financial institutions investing in sports are very conscious that they need to bring existing fans with them,” he said.
RPC’s research also shows a “bounce back” in deal value. Four deals exceeded £1 billion, compared with none exceeding that valuation last year. These acquisitions mainly involved the football industry, such as the sales of Chelsea, AC Milan and investments into La Liga.
PE Hub Europe’s Craig McGlashan recently rounded up European football deals. You can read his analysis here.
Women’s sport, most notably football, but also rugby and netball, is an an area of particular growth, according to RPC’s research.
Getting technical. Stepping away from sport to a tech deal. Leonard Green & Partners and Apax Partners-owned ECI Software Solutions announced that it has acquired B2B eCommerce software and services company ES Tech Group.
Based in Glasgow, ES Tech Group serves small and medium-sized enterprise manufacturers, distributors and wholesalers. The company has also developed an ecommerce platform for markets including industrial, business supplies, electrical, plumbing, medical supplies and more.
ECI is a cloud-based business management solutions business, headquartered in Fort Worth, Texas. It was acquired by Leonard Green in November 2019, with Apax Partners retaining a minority stake in the company, having acquired ECI in 2017. The deal for ES expands ECI’s existing ecommerce portfolio and furthers ECI’s investment sin the digital economy.
Leonard Green is a private equity investment firm based in Los Angeles. Apax is a London-headquartered, global private equity firm. It invests in the technology, services, healthcare and internet/consumer sectors.
That’s all from me today. Craig McGlashan returns tomorrow to write to you as usual.