Good morning Eurohubsters, Craig McGlashan here with the first Dealflow of the week.
I hope you had a good weekend. I spent Sunday watching Scotland play New Zealand at rugby union (unfortunately I don’t have space here to report the result). It was the first time I’d watched a sport streamed live on Amazon Prime. But while some might argue that streaming services are the future of live TV, private equity firms are still seeing potential for growth in terrestrial television.
Mast-have. PE Hub Europe’s Nina Lindholm caught up with Steven Marshall, executive chairman and managing partner at Cordiant Digital Infrastructure, to hear about his firm’s play in that sector.
In early November, Cordiant said it had won final regulatory approval from the Polish Ministry of the Interior for the acquisition of Emitel from Astatine Investment Partners, for an equity consideration of 1.92 billion zloty ($407 million; €409 million).
Warsaw-based Emitel works on radio digitisation, wireless communication systems, smart cities and developing the 5G network.
“When we saw Emitel, in the summer of last year, I felt it was the perfect opportunity,” Marshall told Nina. “It is the sole operator of tall towers used by broadcasters in Poland. It’s the Polish equivalent of the BBC, ITV or Channel 4.”
Emitel is “critical infrastructure”, said Marshall, as it delivers TV and radio signals to most of the population of Poland.
Guernsey-headquartered Cordiant’s investment in Emitel will start off from a “fantastic position from day one”, according to Marshall. “We get £60 million ($71 million; €69 million) of EBITDA on day one, for a business that we’ve spent around £360 million for,” he said. “In addition to that, you’ve got a growing demand right on top of your existing contracts.”
International growth could also be on the cards. “We would love to replicate some of the success that we’ve had in the Czech Republic,” said Marshall. In 2021, Cordiant acquired Prague-based telecommunications company České Radiokomunikace from Macquarie Asset Management for £305.9 million.
You can check out the full interview here, where Marshall outlines the type of firms that could be potential add-ons for Emitel as well as his thoughts on the wider digital infrastructure market.
Taking Cloudflight. Sticking with digital, Partners Group bought a controlling stake in digital transformation services provider Cloudflight from Deutsche Beteiligungs. The deal gave an enterprise value of just under €400 million.
Cloudflight develops software to help firms digitise their businesses. It focuses on aiding long-term projects, using fields such as internet of things, cloud architecture, machine learning and artificial intelligence. It has more than doubled its revenues over the last three years.
Partners will aim to build out Cloudflight’s technical capabilities and expertise, expand into new markets and institutionalise its organisation and operations.
“For many industries and businesses, digital transformation remains top of the agenda for improving value propositions and overall competitiveness in a period of macroeconomic challenges,” said Bilge Ogut, partner, head private equity technology industry vertical, at Partners, in a statement. “This is creating long-term tailwinds for specialist providers such as Cloudflight.”
Check out more on the deal here.
The deal came as little surprise to us, after Kim Nguyen, co-head of Partners Group’s private equity services business, told Nina last week about the firm’s thematic focus on digital transformation.
Partners was also on the hunt for tech deals in the US, buying EdgeCore Digital Infrastructure, a Broomfield Colorado-based owner, operator and builder of hyperscale data centres late last week. Take a look at the coverage of that deal on our affiliate site PE Hub.
In and out. Finally for today, we write once again about one private equity firm that has been busy of late – so busy that we have two deals to report.
Mutares is set to invest in Peugeot Motocycles after the private equity firm submitted an irrevocable binding offer to buy 50 percent of equity and a controlling stake of 80 percent in the firm. Mahindra & Mahindra will remain as a co-shareholder in the deal, expected to close in the first quarter of 2023.
Peugeot Motocycles has annual revenues of around €140 million. It manufactures two and three-wheeler scooters that are distributed across 3,000 points of sale in France and internationally, across three continents
“Peugeot Motocycles is an internationally recognised brand built on a rich history as the world’s oldest manufacturer of motorised two-wheelers,” said Johannes Laumann, CIO of Mutares. “Furthermore, Peugeot Motocycles acts as an OEM and we see a huge potential of strong synergies arising within our automotive and mobility segment.”
The full coverage of that deal is here.
Meanwhile, Mutares exceeded its target ROIC of 7-10x times as it sold steel frame structure and facade producer Nordec Group to a consortium of buyers.
The consortium – mainly comprising Finnish family offices Harjavalta Oy and Tirinom Oy – bought 100 percent of Nordec’s shares.
The sale “achieved the strategically ideal exit solution compared to the IPO planned in spring, which initially would only have been a partial exit”, according to a statement from Mutares.
Read more about that deal, including Nordec’s revenues, here.
That’s it from me – I’ll be back with you tomorrow.