CVC plans organic growth for Spectrum; Tikehau Ace Capital reinvests in Tecalemit Aerospace

Morning Eurohubsters, Craig McGlashan here with the Dealflow.

There was some sobering news in the UK yesterday as a report by MPs found that England is short of 12,000 hospital doctors and more than 50,000 nurses and midwives. The rest of the UK is also struggling with a shortage of healthcare staff, as is a lot of Europe, according to the European Federation of Public Service Unions. This labour shortage is helping drive private equity interest in the sector, according to Cathrin Petty, managing partner and head of healthcare at CVC Capital Partners.

Organic growth. “Off the back of covid, we’ve seen an acceleration of demand for better technology and also a constraint in terms of the supply and labour,” Petty told PE Hub Europe’s Nina Lindholm. “As a consequence, we’ve seen an increased interest into the space and a lot of new entrants.”

Petty also gave a bit more detail on CVC’s latest healthcare investment, in Spectrum, based in Gloucester in the UK. The firm develops high-performance medical technologies in the cardiac bypass and ICU sectors, and is focused on providing technologies that include quantum perfusion systems, quantum informatics and quantum sterile technologies.

Spectrum’s R&D pipeline is “strong” and CVC wants to keep investing behind it, Petty said. This includes investing to scale, and manufacturing new lines and products. Additional M&A, however, is not planned. “CVC have a strong track record in supporting companies with strong organic growth, helping accelerate the international expansion and product rollout rather than just focusing on M&A-led growth,” Petty said. The growth plan also includes accelerating Spectrum’s market strategy in the US, Europe and Asia by exploiting CVC’s network and footprint.

You can read the whole story here. If you’d like to get in touch about other ways that the healthcare sector is changing – as well as the private equity industry’s approach to it – get in touch with Nina at nina.l@peimedia.com

Case for the defence. Last week I mentioned a conversation I’d had with the CEO of a PE services firm who’d told me that ever since Russia’s invasion of Ukraine at the start of the year, many firms that had previously avoided any assets in the defence or weapons sector were changing their tune. “Defence is no longer a bad word”, he told me.

I wrote that article about Tikehau Ace Capital completing its acquisition of Visco, a company focused on high-precision mechanical machining for industries including defence, aerospace, armaments and energy.

That same firm was back again on Monday, announcing a reinvestment in Tecalemit Aerospace, having made its first investment in the firm in 2016.

Headquartered in Chaponost, France, Tecalemit Aerospace manufactures pipes and hoses used in civil, business, military and space aircraft. Covid and the suspension of Boeing’s 737 MAX aircraft in 2020 hit the company heavily.

Paris-based Tikehau Ace Capital will focus on returning Tecalemit to growth and strengthening the group’s financial position. Further development will follow through potential acquisitions, to enable the creation of a European platform.

“This new investment is the beginning of a new start for Tecalemit,” said Guillaume Benhamou, managing director and CEO of Tikehau Ace Capital. “Together with the management, we have collectively launched a significant effort to improve performance. The objective is to establish a clear and positive trend and to reinforce the confidence of customers and suppliers in order to allow the group to find the way back to performance and to become the European champion in its field.”

Founding principles. Finally, I’d thoroughly recommend heading over to PE Hub to read our US colleague Tara Lindenbaum’s excellent profile on Suzanne Yoon, the founder of Kinzie Capital.

There’s lots of great stuff in there, from advice on starting one’s own firm to details on Kinzie’s investment thesis, but I thought Yoon’s insights on the evolving role of women in private equity was particularly insightful.

“The one great thing is there are more female founders; there were none 20 years ago,” she told Tara. “Even though it is a smaller group of women, at least there are more. We still have a long way to go, but I think private equity is starting to recognize that gender diversity on a board is accretive to returns. If anything has improved, it’s the actual dialogue around what we do to attract and retain more women to the deal world. I think it’s becoming more sincere than it was. I also think culture is important, not just for women but for everyone. Having things like maternity leave policies that didn’t exist at most private equity firms a decade ago is really important.”

The whole interview is available here.

I should add that another revelation in the piece (for me at least), was that Richard Gere’s character in Pretty Woman worked in private equity. After revealing to the team that I’d never seen the film, I’m on orders to watch it this weekend.

But if any readers only have time for either Tara’s article or the Julia Roberts film and not both, I’d thoroughly recommend the former.

That’s it from me – speak to you tomorrow.

Cheers,

Craig