We open today by announcing a new data offering from PE Hub Europe, before we take a deep dive into Cerberus Capital Management’s exit from Worldwide Flight Services as we speak to senior managing director Craig Brooks.
Elsewhere, we have an investment in a Scottish port by Quantum Energy Partners and an add-on for a Triton Partners-owned utilities company.
We then round things out with reports that an Apollo-backed firm is finding strong demand for its IPO.
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We’ve been hearing a lot that the difficult market conditions of late are making private equity companies focus more on growing portfolio firms than looking at new investments. That was the strategy run by General Atlantic, its head of EMEA Gabriel Caillaux told PE Hub Europe a few weeks ago.
Cerberus Capital Management took a similar approach to its investment in Worldwide Flight Services. It had the added complication of being in one of the industries most heavily affected by the covid pandemic – although it ended up being an advantage.
“Covid had an unprecedented impact on the aviation industry,” Cerberus senior managing director Craig Brooks told me. “WFS’s business was less impacted because most of its revenues are from air cargo logistics. Also, during covid, WFS pivoted to serving more freighters, which were not subject to the passenger flight restrictions and growth segments of cargo, including e-commerce and pharmaceuticals carried by air. Covid was an opportunity to accelerate our strategy in these growth areas.”
Revenue figures suggest the strategy was the right one, when coupled with a push to penetrate North America, which was growing faster than Europe, and to pivot away from the lower-value ground handling business.
When Cerberus, which has $60 billion in assets across credit, private equity, and real estate strategies, bought WFS for an enterprise value of €1.2 billion, the Paris-headquartered firm had €1.2 billion of revenues. Those had risen to €2 billion when Cerberus completed its sale in early April to Singapore’s SATS for an enterprise value of €2.25 billion.
The combination with SATS, a provider of food and gateway services, was complementary, according to Brooks, building upon the company’s presence in Europe and the Americas, which it serves via its regional headquarters in Dallas, Texas. The firm had also started to make inroads in countries including India.
“WFS is the leading air cargo logistics provider with a network of stations in Europe and the Americas, and has started to grow in Asia,” he said. “SATS is the leader in Asia, so combining these two businesses has created a unique global platform with a network of stations across the Americas, Europe and APAC that doesn’t exist elsewhere.”
You can read the whole interview with Brooks here.
Port of call
Quantum Energy Partners has made a £300 million ($374 million; €339 million) equity investment in Ardersier Port, a 450-acre industrial site located outside Inverness in the Scottish Highlands.
Quantum’s investment will be used to drive Ardersier’s redevelopment, according to a release.
“The site’s scale and geographical location means it is ideally positioned to become a leading European hub for offshore renewable energy,” said Michael MacDougall, partner, Quantum.
Ardersier will facilitate offshore wind projects in the UK and mainland Europe, and domestic decommissioning of aged North Sea oil and gas assets, the release added.
OCU Group, a portfolio company of Triton Partners, will acquire the Northavon Group of companies, including Northavon Group, Northavon Holdings, Northavon Water Services, Hydrovein, and Multivein, along with their respective subsidiaries.
Northavon is a mechanical, electrical, and civil engineering contractor that operates in the South of England and South Wales. The company is based in Radstock, England.
The transaction is expected to be completed in May 2023.
OCU’s acquisition of Northavon will support its growth across the water and wastewater sector and will give OCU a regional presence across the southwest of England, according to a release.
Northavon is OCU’s sixth acquisition in over 12 months, following the acquisition of Modus, InICT, Opals, Andrews Associates and FKS.
We’ve been keeping an eye on whether the European IPO market is showing signs of life after being all but dormant for a few months.
That means we’ve been following the IPO of Apollo Global Management-owned Lottomatica, an Italian gambling company.
It had set a price range of €9 to €11 per share and was offering up to €600 million of shares. According to sources spoken to by GlobalCapital, demand exceeded the deal size within an hour of books opening yesterday.
We’ll keep you posted on that one.