Good morning Eurohubsters, Craig McGlashan here with the middle of the week Dealflow.
We’ve got a feast of content for you this morning. I speak to EQT about its move for a French calibration firm that is no stranger to private equity investment, we look at an aviation linked deal, we have the first in a new podcast series on the effect of rising rates on private equity deals and an the latest in our popular listicle series.
Calibration. We always try to look at the bigger picture on the Dealflow and there was a great opportunity to do just that as I interviewed Thomas Rajzbaum, managing director and head of EQT’s French infrastructure advisory team, about his firm entering exclusive negotiations to take a near 75 percent stake in Trescal.
EQT’s Infrastructure V fund entered negotiations in late November for the stake in the firm, which provides regulated calibration services for testing and measurement equipment. Incumbent majority owner OMERS Private Equity is reinvesting for 25 percent, with management led by CEO Guillaume Caroit holding the rest. OMERS bought the Paris-based firm from Ardian in 2018, at a valuation of €670 million.
The company is now valued at around €1.4 billion, PE Hub Europe understands. But its further growth will benefit from an earlier acquisition by EQT, Rajzbaum told me.
“When the company was with Ardian, it was a very, very different animal,” said Rajzbaum. “What has been done by OMERS in the last few years is to start the Asian journey and to diversify in life science. This is just the beginning. Organically there’s a lot to be done and I’m pretty convinced that we’re going to find new geographies and open new verticals.
“The beauty of Trescal as a global leader is that it can serve global clients who want a one-stop shop for their global calibration. But they also serve local clients. They have a global footprint with a presence in Asia and in the US. As a global firm we can really help them in their next phase of growth, especially in the US where they still need to consolidate but also in Asia where EQT recently acquired Baring Private Equity, which makes us one of the leaders in Asia.”
After the completion in late October of the tie-up between Stockholm-headquartered investment firm EQT and Baring to create BPEA EQT, EQT CEO Christian Sinding told us: “Succeeding in Asia requires local relationships and experience with global capabilities and expertise.”
Check out the full article to find out more about how EQT will leverage those local relationships in Asia to grow Trescal, what made the firm attractive to EQT, the likely exit strategy and what Rajzbaum calls “the language of calibration”.
Taking off. Sticking with infra, Tiger Infrastructure Partners announced the acquisition of International Aerospace Coatings (IAC), an aviation services provider headquartered in Shannon, Ireland and Irvine, California.
IAC has 18 hangars located at seven airports and two customer sites in the US and Europe to provide services to customers in the global aviation industry, including aircraft manufacturers, commercial airlines, aircraft leasing companies, air cargo carriers and governments.
“As a growth-oriented infrastructure investor, we were attracted to IAC because of its compelling growth prospects, leading market position, substantial asset base and long-term relationships that provide barriers to entry, and stable, reoccurring revenues from providing essential services,” said Emil W Henry, Jr, CEO of Tiger Infrastructure. “With operations in both the United States and Europe, IAC aligns well with Tiger’s trans-Atlantic footprint and execution capabilities, which are a source of competitive advantage for us in the middle market.”
IAC’s core business involves aircraft painting, aviation technical services, aircraft interior refurbishment and aircraft graphic solutions.
Tiger Infrastructure Partners is a private equity firm focused on middle market infrastructure companies. It has offices in New York and London.
Podcast. Sticking with elevation, we are very excited to announce the first episode of our miniseries, Private Markets and the End of Cheap Money.
Mary Kathleen Flynn, editor-in-chief of affiliate title PE Hub, spoke with a wide range of dealmakers, including private equity firm leaders, lenders and investment bankers, about the impact of high interest rates and other factors like high inflation on private equity-backed transactions.
You can listen to the episode here.
In the episodes to come, we’ll speak to LPs about the changes to their portfolio allocations. We’ll ask whether the “L” in LBO becoming more expensive means private credit becomes a more attractive asset class to investors. We’ll look at how private markets professionals in different parts of the world are navigating this new environment. And we’ll learn about some of the key indicators that industry professionals monitor in these uncertain times.
Northern spirit. Moving on to another colleague, PE Hub Europe’s Nina Lindholm celebrated Finnish Independence Day yesterday. In honour of that, she’s knocked up a Nordic listicle special.
Cinven, CVC and Nordic Capital were among the private equity firms seeing potential in Nordic companies over the last few months.
Check out the whole list here.
While we’re on the subject of the Nordics, it’s also a good time to make sure that if you haven’t read Nina’s piece about Nordic Capital’s bumper 19x exit from The Binding Site, that you do so now. You can find it here.
Test content. LDC announced its portfolio company MSQ has acquired Miri Growth, a fully managed user acquisition and creative services agency.
London-based Miri works with mobile gaming and mobile app developers to produce and test creative content to attract and retain “high-value” users across digital channels. It seeds that content out through performance marketing campaigns on channels such as Meta, TikTok, Google and Snapchat, measuring success and performance in acquiring users to drive profitable growth.
The transaction is MSQ’s third acquisition in 13 months, according to LDC.
Read LDC investment director John Clarke’s thoughts on the deal here.
That’s it from me – I’ll be back again tomorrow.