Good morning Eurohubsters, Craig McGlashan here with the Dealflow.
I’m tapping back in for Nina Lindholm after my week off. I’d love to say that I’ve come back from holiday fully refreshed, but thanks to a delayed flight and train last night I’m a little behind on sleep. Luckily for me, the team have already written up some excellent content for you this morning.
Unexpected offers. First up, Nina Lindholm spoke to Krzysztof Kulig, senior partner at Warsaw-based Innova Capital, about the firm’s agreement in late October to sell a 100 percent stake in Inelo Group to Eurowag in a deal worth in excess of €300 million after a four-year holding period.
Prague-based Eurowag, a pan-European integrated payments and mobility platform focused on the commercial road transportation industry, wasn’t the only interested party in Inelo. “Towards the end of last year, we got a bunch of unsolicited approaches – offers from both financial and strategic investors,” Kulig told Nina. “That meant that the market was quite interesting for an exit.”
Inelo, headquartered in Bielsko-Biała, Poland, provides integrated IT services for heavy-duty transport in the CEE region. The company’s product offering includes driver time analysis and calculation software and GPS satellite location software to aid driver vehicle tracking, routing and vehicle monitoring.
“We basically took these products and bundled them together in order to secure customer loyalty,” Kulig said.
You can read Nina’s full interview with Kulig here, including about how Innova sought to improve Inelo’s operations and the add-ons it conducted.
But I was particularly interested to note some of Innova’s other plans. The firm held a first close of its seventh fund over the summer. The vehicle targets €350 million, and it will follow the strategy of its predecessor.
“One area we will continue to focus on is technology,” Kulig told Nina. “We very much like to invest in business outsourcing, IT and B2B. There’s a lot of IT talent in Central Europe, which we can capitalise on.”
My week off was spent in Lithuania – by some measures the geographical centre of Europe. I’d heard a lot there about how local IT firms were providing back-office services for international banks, so it looks like this trend has more to run.
It also tallied with a story I wrote back in early September about Queen’s Park Equity adding Hungarian software developer JayStack to its portfolio firm One Beyond.
Energy boost. I’m on my second cup of coffee this morning, but it looks like I’m not the only one interested in getting more energy.
CF Pathways secured an equity investment from private equity and infrastructure firm Ara Partners.
CF Pathways provides green energy and net-zero related services to over 5,000 large industrial customers across Europe and the UK. The company comprises CF Partners and Brook Green Supply and achieved €2.5 billion in revenues in 2021. The company has seen demand for its services rising due to the energy crisis as companies try to manage and mitigate their exposure to energy prices.
Ara’s investment will support London-based CF’s development of its software and data capabilities and the growth of its energy transition product offering, the firms said.
“As an innovation leader in developing and delivering market-based low carbon and set-zero solutions, CF Pathways ideally aligned with Ara’s industrial decarbonisation investment strategy,” said Christopher Picotte, a partner in Ara’s Dublin office.
Ara Partners is a private equity firm headquartered in Houston, Texas that specialises in industrial decarbonisation investments.
Oil be darned. Sticking with energy, one potential deal looks like it won’t be going ahead.
We wrote back in mid-September about US private equity firm Crossbridge Energy Partners taking an interest in buying an Italian refinery owned by Russian energy group Lukoil.
But the Financial Times reported that Lukoil has turned down the offer, citing people close to the talks.
At your leisure. Finally for today, another exit to report. Kings Park Capital (KPC) announced it has exited Lakeshore Leisure Group (LLG) to a new UK subsidiary of Capfun, a pan-European operator of 175 family-focused holiday parks and campsites. The exit to Mouans-Sartoux-headquartered Capfun delivers a money multiple of 3x and an IRR of 46 percent for KPC’s investors.
LLG was created in July 2019 when KPC partnered with its CEO, Stephen Twiss, to acquire under-invested and undermanaged domestic holiday parks.
KPC is a London-based private equity firm that invests in the European leisure sector. Since inception KPC has raised over £130 million ($146 million; €149 million) of committed capital across two funds.
That’s it from me – we’ll speak again tomorrow.