EU medical device regulation boosting cross-border growth; Blackstone eyes Pink Floyd catalogue

Sun Capital Partners' Braganza: Shifts in European medical device legislation great for businesses that are well set up to do it, challenging for those who haven't seen it coming.

Good morning Eurohubsters, it’s Craig McGlashan here with the Dealflow.

We’re always keen to look into ways that the European private equity market differs from the US and one of the biggest sectors in which it does is undoubtedly healthcare, with the US enjoying strong integration while Europe is much more fragmented. But today I’ve written about how a European Union regulation is helping bridge the divide – for medical devices at least.

Just the medicine. The Medical Device Regulation (MDR) came into force gradually from its publication in May 2017 and has applied fully since May 2021. From May 2024, all devices placed on the market must conform with the MDR and by May 2025, any devices still in the supply chain that have not reached a final user must be withdrawn.

By introducing greater levels of harmonisation, the regulation has provided a little more stitching to the fractured European healthcare sector, boosting cross-border opportunities, Mark Braganza, managing director at Sun European Partners, told me.

“The advantage that some product spaces have is that regulation can provide consistency and Europe, since the European Medical Agency’s founding, has gone through more and more harmonisation of the standards,” said Braganza. “There have been some recent shifts in the medical device legislation in Europe that have slightly shifted the way that European regulators look at medical device regulation, which is great for those businesses that are well set up to do it and slightly more challenging for businesses that haven’t been ahead of it and seen it coming.

“But it does allow those products to be taken cross-border if you’re set up for it.”

When the EU MDR launched, several medical products experts applauded the fact the EU MDR brought the bloc’s standards closer to that of the US Food and Drug Administration – potentially opening even more cross-border growth opportunities.

“It also allows you to think about how a product fits with the regulation in other geographies, not just the US,” said Braganza. “For great products that are built here in Europe, with the right mindset, there is absolutely no reason why those great products can’t be moved into other geographies as well.”

Sun European Partners, based in London, is the European adviser to US-based Sun Capital Partners, which has offices in Boca Raton, Los Angeles and New York.

You can read the whole interview here.

Money. In what is truly a headline writer’s dream, US private equity firm Blackstone is in the running to buy the back catalogue of British rock group Pink Floyd, the Financial Times has reported. The potential deal could value the band’s songs – including Another Brick in the Wall, Comfortably Numb and Shine On You Crazy Diamond – at almost $500 million, the report said.

The FT went with the headline ‘Another brick in the Wall Street as Blackstone seeks Pink Floyd catalogue’. I’d have gone with ‘Money, (don’t) get away’. My PEI Media colleague Tim Kimber went with the impressive ‘The great bid in the sky’.

I’d love to hear your Pink Floyd headlines. Send them to me at craig.m@peimedia.com and the best ones will get a shoutout in the Dealflow.

Going digital. On the confirmed deal front, A&M Capital Europe (AMCE) portfolio company Ayesa has agreed to buy 100% of Ibermática from ProA Capital and other minority shareholders, including ONCE and Kutxabank.

The acquisition will create an international group with advanced technological capabilities, broad sector penetration and a deeper presence across Spain, said Ayesa. It is Ayesa’s third acquisition of the year. AMCE made a majority investment in the Seville-based provider of technology and engineering services in October 2021.

Ibermática was founded in 1973 and helps corporations and public administrations digitalise.

The combination of the two companies will create a digital services group with a turnover of over €600 million. Ibermática will retain its headquarters in Euskadi, Spain.

JayStack-ing up. Sticking with software, Queen’s Park Equity-backed One Beyond, formerly DCSL, has bought Hungarian software development company JayStack.

JayStack provides blue-chip clients across the UK and Europe with business-critical software and cloud infrastructure. Budapest-headquartered JayStack has grown to a team of nearly 100 engineers. One Beyond is a software engineering and digital transformation company headquartered in Farnborough in the UK. It employs over 300 people.

“We are delighted to welcome JayStack into the One Beyond group,” said Sami Igout, investment manager at QPE. “JayStack’s expertise in working with enterprise scale clients across Europe, its reputation for quality and its excellent team culture make JayStack a highly attractive and natural fit with One Beyond.”

As part of the deal, former JayStack CEO Péter Zentai will take up a new role as chief technology officer at One Beyond.

Do the research. Horizon Capital portfolio company STRAT7 has bought Jigsaw Research, a London-based market research agency that works with companies including American Express, the BBC and Deloitte.

Founded in 1998, the company provides quantitative and qualitative research across a range of sectors.

STRAT7, also based in London, is an insight consultancy that works with global brands. It has been a Horizon Capital portfolio company since 2019 and generates over £60 million (€71 million; $71 million) in revenue annually.

That’s it from me – I’ll see you again on Friday.

Cheers,

Craig