Good morning Eurohubsters, Craig McGlashan here with the Dealflow.
We’ve got a range of deals across various sectors to tell you about this morning – even as one report highlights a slowdown in European acquisitions. First up, we have a broadcasting deal.
Robust growth. Cordiant Digital Infrastructure announced that it has received final regulatory approval from the Polish Ministry of the Interior for the acquisition of Emitel from Astatine Investment Partners.
Emitel is a terrestrial TV and radio broadcast infrastructure operator in Poland with headquarters in Warsaw. Cordiant is acquiring the company for an equity consideration of Z1.92 billion ($407 million; €409 million). The deal is Cordiant’s largest ever.
Emitel has shown consistent year-on-year growth, according to Cordiant. In its financial year to December 2021, the company delivered revenues of Z486 million and EBITDA of Z319 million. The transaction represents an enterprise value to the last 12 months’ EBITDA multiple of approximately 9.4x.
“The completion of the acquisition of Emitel will be a further strategic milestone for the company,” said Shonaid Jemmett-Page, chairman of Cordiant, in a statement. “It is a significant acquisition of a profitable and diversified platform in a market where data consumption growth is among the most robust in Europe.”
Guernsey-based Cordiant invests in digital infrastructure.
Astatine is a mid-market private equity firm headquartered in Greenwich, Connecticut.
Check out our full coverage here.
Kop a deal. Private equity firms with an interest in sports are likely to be following news that the owners of Liverpool FC have said they are open to offers for the football club, which plays in the English Premier League (EPL) and has one of the largest supporter bases in the world.
Fenway Sports Group (FSG) bought Liverpool for a reported £300 million ($343 million; €344 million) in 2010. It said in a statement yesterday: “There have been a number of recent changes of ownership and rumours of changes in ownership at EPL clubs and inevitably we are asked regularly about Fenway Sports Group’s ownership in Liverpool.
“FSG has frequently received expressions of interest from third parties seeking to become shareholders in Liverpool. FSG has said before that under the right terms and conditions, we would consider new shareholders if it was in the best interests of Liverpool as a club.
“FSG remains fully committed to the success of Liverpool, both on and off the pitch.”
One potential buyer touted in media reports is US private equity firm RedBird Capital Partners, which in 2021 bought a $735 million stake in FSG, taking around 10 percent of the firm.
But RedBird bought Italian football club AC Milan in August, meaning a move to control another of Europe’s biggest teams could fall foul of football authorities.
You can read some of the motivation behind RedBird’s purchase of AC Milan in PE Hub Europe’s piece here.
Approach. Sticking with the UK, CVC Capital Partners has approached IWG, a FTSE 250-listed serviced offices provider, about buying its digital arm The Instant Group, according to Sky News.
Luxembourg-based CVC is one of several buyout firms that have made an approach for the division, the report said.
“If a deal materialised at a valuation of around £1.5 billion ($1.7 billion; €1.7 billion), that would be larger than the current market value of IWG, which has seen its shares more than halve during the last 12 months,” the report added.
On pause. The moves in valuations over the last year is also having an effect on the wider market, according to a new report from ADDX, a digital exchange for private markets.
The report said that private equity acquisitions of European business dropped 6 percent in the 12 months to September 30, from 2,361 in 2020/21 to 2,211 in 2021/22.
That fall was particularly pronounced in the UK, with purchases of companies dropping 20 percent to 440.
The overall European fall has sped up in the last three months, with 420 deals completed. That was a drop of 29 percent on the previous three months and 39 percent in the same quarter of 2021.
“Some PE funds have started to put deals on pause as the economic cycle turns and they wait for sellers’ expectations to catch up with the economy,” said Oi-Yee Choo, CEO of ADDX, in a statement. “With inflation still above 8 percent across much of Europe and central banks tightening credit, funds are expecting that valuations on transactions are going to fall.
“If prices fall then there is the chance that the returns they deliver their investors will start to approach those that 2009-vintage funds delivered.”
The potential for excellent dealmaking conditions to follow a drop in valuations is a theme we’ve been following for a while at PE Hub Europe. Check out my interview in August with Jean-Baptiste Wautier, partner and chief investment officer, private equity, at BC Partners, for his thoughts.
Full of energy. One sector that doesn’t feel like it’s slowing down is energy. Yesterday, we covered Ara Partners investment in CF Pathways, and more such deals kept coming.
HitecVision announced it has made an investment in Norwegian small-scale hydropower company Cadre, alongside Nordkraft. Cadre will be developed into a larger owner, developer and buyer of hydropower plants.
Small-scale hydropower plants in Norway generate an average combined production of just under 13 TWh of power annually. Cadre’s target is to produce 2 TWh within a few years.
“The need for rapid development of more renewable power is obvious,” said Eirik Frantzen, CEO of Nordkraft, in a statement. “Even Norway is experiencing a new era, with both an increase in power demand and extreme prices. This provides an important backdrop for Cadre’s growth plans in small-scale hydropower. For Nordkraft, this opportunity is unique.”
Elsewhere in energy, Mutares announced that it has completed the acquisition of Siemens Energy Engines, a manufacturer of gas and diesel engines for power generation, cogeneration, waste-to-energy and marine uses.
The company will operate under the name Guascor Energy. It is is based in Gipuzkoa, Spain and employs around 270 people worldwide. It is the first platform acquisition in Spain by Mutares.
Potential energy. Private equity firms with an interest in energy will likely be following the planned London listing of North Sea oil and gas producer Ithaca Energy on Wednesday.
The IPO is set to be priced at £2.5 per share, a banker on the deal told Reuters today, at the low end of guidance. Original price guidance was set at £2.5 to £3.1 per share, implying a market value of £2.5 billion to £3.1 billion.
Ithaca is owned by Tel Aviv-listed Delek Group.
That’s it from me. I’ll be back with you tomorrow.