Carlyle adds to tech flurry as rates consensus helps bridge sector’s bid-ask spread

Beauty M&A in spotlight.

Technology, a sector that dominated this week’s private equity activity, is today’s opening topic. Yesterday, we reported a deal in which Carlyle agreed to buy a majority stake in a business software provider.

Then, I will turn your attention to some comments from Eric Sanschagrin, managing director, technology at investment bank William Blair, on the attractiveness of the technology sector. I’ll also briefly summarise five tech deals we reported this week.

Lastly, I will switch sectors to highlight Craig McGlashan’s listicle on five private equity-backed cosmetics deals.

Tech dominance

Technology has been the busiest sector by our reckoning in the second half of the year.

Adding to the list, yesterday we reported that Carlyle Group will acquire a majority stake in GBTEC Software, a business process management and governance, risk and compliance software provider, from Main Capital Partners.

Bochum, Germany-based GBTEC’s founder and CEO Gregor Greinke will remain the largest private shareholder in the company.

The equity for the investment will be provided by CETP V.

“GBTEC is well placed to benefit from one of the most important technology trends, digital transformation and specifically, the automation of business processes,” said Michael Wand, MD and co-head of the CETP investment advisory team.

Clearer signs 

A growing consensus that interest rates have peaked for this cycle is benefiting the technology market, Eric Sanschagrin, managing director, technology at investment bank William Blair, told me.

“This in turn is helping bridge the bid-ask spread that has been holding back processes, particularly for larger transactions, over the past twenty-four months,” Sanschagrin said. “We’re still far from the euphoria of 2021, with financing still a challenge for some deals, but the worst is probably behind us and the market is starting to show clearer signs of improvement.”

The deals that are being done involve “quality” companies, he added.

“Mission-critical software with high retention rates and a strong combination of growth and margin are still attracting the interest of GPs and strategics alike,” he added. “This is especially true for those companies sitting in the €150 million to €500 million enterprise value range, where GPs see a significant runway to create value.”

Here’s a roundup of some of this week’s other tech deals:

Beauty at play 

Our shopping list is already in the works as the holiday season draws closer. Cosmetics are at the top of my list because what better way to pamper ourselves and others.

Private equity is also taking particular interest as we reported five cosmetics deals since the beginning of 2023. Craig McGlashan has compiled a listicle for you which involves Aurelius, Advent International, HIG Capital, Investindustrial and Keensight Capital.

With inflation eating into shoppers’ spending money, many consumer sub-segments have struggled. But investment banking sources have told us that the cosmetics sector has been resilient – whether that’s down to Instagram or some other factors is hard to say.

Check out the full listicle to pick your favourite from the lot.