Oakley Capital buys CTS from Palatine and Phenna stake from Inflexion; ECP bid for Biffa postponed again

Oakley’s acquisition of CTS Group follows its purchase of Inflexion’s minority investment in Phenna Group, a deal that values Phenna at over £1bn.

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

The summer lull feels firmly behind us now as we have a bumper crop of deals to report. So let’s jump straight in – with a round of pass the private equity parcel to start.

To me, to you. Palatine has sold CTS Group to Oakley Capital. CTS Group, headquartered in Leicester, is a UK-wide network of laboratories and offices, offering a range of construction testing, inspection and compliance services.

Oakley’s acquisition of CTS Group follows its purchase of Inflexion’s minority investment in Phenna Group, a deal that values Phenna at over £1 billion ($1.1 billion; €1.1 billion).

Sources close to the deal told PE Hub Europe that the deal represents a more than 5.5x return for Inflexion.

Following the completion of both deals, CTS will become part of Phenna, a Nottingham-based group of specialist businesses focused on the testing, inspection, certification and compliance sector. The CTS management team will continue to lead the business within the wider group.

“This excellent outcome is a major milestone in what we are sure will continue to be a remarkable growth story for CTS and its new partners,” said Tony Dickin, partner at Palatine.

“Phenna’s leadership team created an excellent platform to create a global leader,” said Simon Turner, managing partner at Inflexion. “Our significant sector expertise gained from other investments in the sector helped us to recognise the potential they could achieve, while our M&A experience served their ambition well.”

CTS had been on a bit of a buying spree this month, taking London-based Concept Engineering Consultants and In Situ Site Investigation, a firm based in St Leonards-on-Sea in the UK.

Palatine is based in Manchester while Oakley and Inflexion are headquartered in London.

Waste not, want not (yet). Sticking with UK targets, US private equity firm Energy Capital Partners (ECP) is still in the running to take waste management company Biffa private, after winning a third extension to the deal deadline.

High Wycombe-based Biffa said on Tuesday that ECP had requested a 28-day extension to the deadline for it to announce a firm intention either to purchase the firm or end its interest. The Biffa board and regulator the Panel on Takeover and Mergers agreed to the request, pushing the deadline back to September 27.

Biffa announced on 7 June that after a series of unsolicited and indicative proposals from Summit, New Jersey-headquartered ECP, negotiations had led to a possible offer for all Biffa’s share capital at £4.45 ($5.19; €5.18) a share. That equated to a total price of around £1.4 billion.

The first deadline for ECP to announce a firm intention was 5 July, which was then pushed back to 2 August, and then to 30 August.

Biffa’s share price on the London Stock Exchange had closed the day before the deal talks were first announced at £3.25 and ended the day of the announcement at £4.13. It then declined past the first deadline of July 5 to around £3.63 but found a new lease of life after the extension on 2 August was announced, jumping to £4.01, where it has since hovered. At time of writing on Wednesday morning, it stood at £3.95.

Top five. Mecachrome has finalised the purchase of WeAre Group, creating a group that aims to become one of the five largest manufacturers of aerospace parts in Europe.

The new group has a presence in five countries through more than 20 production sites and a workforce of 3,700. It aims to achieve a turnover close to €450 million in 2022 and to reach over €750 million by 2025.

The formation of the group has been backed by Tikehau Capital and Bpifrance, which own a 64.3 percent and 35.7 percent stake, respectively.

WeAre Group was previously owned by the Farella family, who held about 84% of the capital before the transaction.

“Mecachrome and WeAre Group are two strategic industrial players in the aeronautics, space, defence and automotive sectors,” said Marwan Lahoud, executive chairman of Tikehau Ace Capital. “By promoting and enabling the combination of their teams, we are pleased to contribute to the consolidation of the European market.”

Mecachrome and WeAre Group are based in France, in Amboise and Montauban respectively.

Tikehau is a pan-European asset manager and investor. It invests across private debt, real assets and private equity. The private equity arm of the firm, Tikehau Ace Capital, has €4.5 billion of assets under management.

Bpifrance is the French public investment bank and is based in Paris.

Going for Gilde. Gilde Healthcare has announced its intention to buy Sanquin Reagents, a producer and seller of blood group and immune reagents, from Sanquin Health Solutions. Gilde Healthcare’s investment will allow Sanquin Reagents to scale up the production of diagnostic tests and grow its research team, the firms said.

The deal for Amsterdam-based Sanquin Reagents is the first investment of Gilde’s €517 million Private Equity Fund IV.

Utrecht-based Gilde Healthcare is a specialised healthcare investor. It manages €1.4 billion across two funds: one for private equity and one for venture/growth.

That’s it from me – have a great day and we’ll speak again on Thursday.