As this is my first Dealflow of 2024 I’ll say a quick happy new year before we dive into the news.
We’re taking a look at exits this morning, both in terms of a completed deal and how the process of selling assets has changed.
First up, Hg has managed to sell a chunk of a MeinAuto Group, a business it originally tried to list a few years ago. This could well be a sign that the exit market is opening up after a difficult 2023.
Next, 3i’s Severin Matten tells us about how the adoption of artificial intelligence is contributing to outside-in due diligence becoming a prerequisite for potential exits rather than just being a differentiator.
Hg has managed to sell part of a business that it originally tried to IPO nearly three years ago.
The tech-focused private equity firm closed the sale of the MeinAuto and Mobility Concept divisions of MeinAuto Group to Mobilize Lease & Co, a subsidiary of Mobilize Financial Services, part of the Renault Group.
MeinAuto Group is a German online retailer for new cars. The business was established in 2018, following Hg’s initial investment in MeinAuto.de, a B2C online service for car purchases.
It planned to list the company on the Frankfurt Stock Exchange in May 2021, but pulled the IPO, citing “adverse market conditions for high growth companies”.
The sale of Mobility Concept and MeinAuto.de represent €1 billion in fleet assets, a fleet of 50,000 vehicles and 250 employees.
Hg will remain invested in Athletic Sport Sponsoring, a flat-rate car subscription provider and a former division of MeinAuto Group, which will be built out as a standalone business, according to a press statement.
Rise of the machines
I spent quite a bit of time over the break reading about generative AI and specifically about how it’s likely to go ‘mainstream’ in 2024, being adopted by more and more businesses.
But it’s already making a difference to the due diligence process in private equity exits, Severin Matten, director and member of 3i’s global healthcare team, told PE Hub Europe in the latest of our outlook Q&As with private equity dealmakers.
How was your dealmaking experience in 2023?
The 2023 dealmaking environment was driven by a high level of market transparency on relatively few opportunities. This coincided with a flight to high-quality and less cyclical sectors like healthcare, software and services. Auction processes in these areas continued to be run in their traditional format but often experienced prolonged timelines in light of pre-2023 valuation expectations, market uncertainties and increased levels of due diligence. That said, trophy assets still saw pre-empts or multiple bidders competing on binding offers. The latter was also a function of a lot of pre-deal preparation done by funds since the start of covid.
Generally, thorough outside-in due diligence for upcoming exit processes, especially for PE-owned companies, has probably moved from being a differentiator to becoming a prerequisite to successfully compete on sought-after assets. A contributing factor to this is the use of AI and technology platforms to accelerate due diligence. This is certainly true for large and upper-mid cap transactions but is starting to creep into the lower-mid cap market. As a result, GPs need to be selective on where they want to play, and focus their resources accordingly.
Check out the full article to get Matten’s thoughts on healthcare opportunities in 2024.
To finish I’m going to switch away from exits onto an investment – one that might be a good read for anyone still getting over the end of the holidays.
Vitruvian Partners-backed travel tech company Travel Counsellors has announced the acquisition of Planisto, a fellow travel tech provider.
The integration of Planisto will accelerate Travel Counsellors’ technology development plans and focus on the premium travel market, according to a press release. Planisto is based in Wijgmaal in Belgium.
Planisto was developed over several years by Belgian B2B travel technology company EURAM, the release added.
The deal is Travel Counsellors’ second acquisition following the acquisition of Birmingham-based Holidaysplease in March 2023.