Good morning Eurohubsters, Nina Lindholm here with the last Dealflow of the week.
We’ve got quite a variety of topics to cover today. PAI Partners’ portfolio company, European Camping Group, completed its purchase of Vacanceselect, and PE Hub Europe got to hear the rationale behind the deal in an exclusive interview. There is also an exit by Montefiore Investments to look at as the firm parted ways with a French domain name registrar.
We also continue yesterday’s discussion on take-privates, following Apollo’s advances on John Wood Group. For those looking for something to listen to rather than read, we’ve also published our last episode in our podcast series.
Glamping. I sat down with Bertrand Monier, a partner at PAI Partners, and European Camping Group (ECG) president Alain Calmé to discuss ECG’s acquisition of Vacanceselect, a deal that closed just yesterday.
Alkmaar-headquartered Vacanceselect is a Dutch campsite and mobile-home operator that had been owned by funds advised by Permira since 2015. ECG, an Aix-en-Provence-based European tour operator that specialises in the mobile home holiday market, was acquired by PAI Partners in September 2021.
We covered many topics, including how the outdoor accommodation sector has evolved, but I found it interesting to hear why PAI and ECG were ready to make this acquisition.
“When we underwrite, we need to check market fundamentals and be sure we are comfortable with long-term trends,” Monier told me. “We also need to confirm the robustness of the platform and that the management team is in full control. We acquired ECG only 18 months ago, and all these requirements have been met. That’s why we’re comfortable making this big step.”
To find out more on the deal, including the enterprise value, read the full story here.
Exit. Moving from outdoor accommodation to web hosting. Montefiore Investment sold its majority stake in Gandi, a French domain name registrar, web hosting company and provider of email and SSL certificates, to Total Webhosting Solutions (TWS).
Gandi and TWS have merged both the companies to create Your.Online, a European online services platform.
“For four years, we have worked hand in hand to accelerate the growth of the business, notably with key accounts, develop new innovative products, and improve profitability,” said Daniel Elalouf, managing director & partner at Montefiore Investment.
To find out more about how Gandi grew during the ownership period, read our full coverage here.
Wood you be interested. Yesterday we spoke about John Wood Group, a multinational engineering and consulting business based in Scotland, receiving three approaches from Apollo Global Management.
The most recent approach was on 26 January and offered 230p per share, valuing the company at around £1.6 billion ($1.9 billion; €1.8 billion). The Wood board had unanimously rejected each offer.
Apollo declined to comment when approached by PE Hub Europe. But a source close to the discussions pointed to the offer giving a premium of around 50 percent to Wood’s closing share price of roughly 150p before Wood made the approaches public later that day.
“That’s a pretty big premium,” the source said. “Even on a six-month trading basis, it’s pretty heavy. For a business that’s been underperforming, it’s as good as any you’ll see.” Such premiums are usually 15 to 20 percent, or sometimes 30 percent, the source added.
Recent completed take-privates in the UK include Sun European Partners buying K3 Capital Group at a premium of 16.7 percent to the previous day’s closing price, Energy Capital Partners buying Biffa at 28 percent premium and Astorg and Epiris buying Euromoney Institutional Investor at 33.5 percent premium.
One potential deal, involving Mayfair Equity Partners and maternity wear firm Serpahine, has a premium of 206 percent. In that case though, Mayfair already owns 43 percent of Seraphine.
The Wood board said it had unanimously rejected each Apollo offer as the bids had “significantly undervalued the repositioned group’s prospects”.
Wood outlined a new strategy at a capital markets day in late November, where it highlighted its sale of Built Environment Consulting as having “restored” its financial strength and said that its new leadership team had tackled the reasons for its underperformance, “notably by improving project discipline and selectively focusing on reimbursable and low-risk contract work”.
Shareholders seemed unimpressed, however, with the firm’s share price dropping from about 160p before the meeting to 134p afterwards.
“The proof is in the pudding,” said the source. “They implemented some changes and the share price hasn’t moved. Actually, there’s been some big drops.”
Weekend listening. In the final episode of Private Markets and the end of Cheap Money, we hear from LPs and GPs who share what key indicators they keep their eyes on to help make sense of the rising interest rate environment.
Listen to the first four episodes in the series here.
That’s all from me. I hope you have a good weekend. Craig McGlashan will write to you on Monday.