We’ve got some news to reveal on the tech front this morning, as we talk about Partners Group rolling out an internal generative AI model to all its employees. We speak to Patrik Bless at the firm about how the system is being used and its ultimate goal. We also take a look at a deal in the biogas sector by Partners.
Then we have LDC exiting its investment in a marketing company to One Equity Partners – we have the deal value and money multiple return on that one for you.
We’ve then got a couple of new take-private offers to report, as Antin makes a voluntary cash tender for a Spanish renewable energy company and a UK financial software business confirms interest from EQT.
Rise of the machines
We’ve been asking our private equity contacts about whether generative AI systems such as ChatGPT were becoming part of their workflow. Over at Partners Group, the answer is a resounding ‘yes’.
“We had actually deployed an internal, ringfenced model of GPT-3.5 to a group of pilot users and this was recently rolled out to all of our employees – we call it PRIMERA GPT,” Patrik Bless, co-head of business applications and chief information security officer, told PE Hub Europe’s Nina Lindholm.
“Now we are in a phase where we’re expanding its use by educating, collecting use cases, and sharing good practices across the different business lines at the firm. The ringfencing aspect obviously is the key differentiator to the commonly seen models on the Internet as it guarantees the privacy and confidentiality of our data.”
Privacy and data confidentiality are two of the key topics that have come up in our discussions with sources about generative AI. Read more on how the increasingly cross-border nature of private equity could create problems around those topics and why building internal AI systems like Partners has might be difficult for smaller firms.
Partners already has what Bless called a “pretty simplistic Google search-type function” that allows the firm to source content from all the documents it’s collected since its founding in the 1990s. “We are now looking to augment this with the help of large language models and become able to answer questions with even more precision.”
“The goal is to get even better at analysing our global internal data and for it to assist us in drawing conclusions earlier on than before,” he added.
To read about how dealmakers and third-party origination service providers are using generative AI, check out this piece by Rafael Canton.
We’d love to find out how generative AI is changing your business – drop me a note at craig.m@pei.group to share.
Tailwinds
Sticking with Partners Group, and the firm this morning announced it has agreed to acquire a biogas and biomethane energy platform in Germany from Energiedenker Group.
The platform operates a 60 MW portfolio of 35 biogas plants and 10 biomethane plants across northeast Germany.
Partners will work with management to build out the platform’s project pipeline, develop ancillary service lines and strengthen its contract management capabilities, according to a release.
“We are investing in an infrastructure platform that is benefitting from tailwinds driving the transition of biogas and biomethane from peripheral fuels into mainstream energy sources,” said David Daum, MD, co-head private infrastructure Europe, Partners Group, in a statement.
Marketing
LDC has sold its investment in MSQ, generating a money multiple return of 3.9x, to One Equity Partners (OEP).
The transaction was valued at £170 million (€198.58 million; $214 million), according to a source close to the matter.
MSQ is an international group of agencies that spans marketing, technology and insight. The company is based in London.
The transaction reflects growth in EBITDA from £6 million to more than £20 million over the past four years, according to a release.
LDC will reinvest in MSQ as a minority partner alongside OEP.
LDC and One Equity will support MSQ in accelerating international growth and building out its data-driven and tech-enabled model, the release said.
LDC first invested in MSQ in May 2019. It has supported MSQ’s management team to deliver its organic and acquisitive growth strategy, which has been a key driver in increasing revenues from around £50 million to £125 million, the release added.
MSG has completed five acquisitions during LDC’s investment period and has more than doubled its headcount from 550 to 1,200 people across America, Asia and Europe.
Public to private
Switching back to infrastructure news now, as Antin Infrastructure Partners, via its Flagship Fund V, announced this morning a voluntary cash tender for Spanish renewable energy company Opdenergy, a business that went public less than a year ago.
Antin is offering €5.85 per share, which values the potential deal at €866 million. That’s a premium of 46 percent over the last undisturbed price, 42 percent over the weighted average price for the last six months and 23 percent compared to the company’s IPO price in July.
The offer is “an amicable transaction” and follows an agreement with founder shareholders and CEO Luis Cid Suárez, who hold a combined 71 percent of the company and have provide irrevocable undertakings to sell all their shares to Antin, according to a statement. The offer has a minimum acceptance level of 75 percent.
Opdenergy has 904 MW in operation, 951 MW under construction and pre-construction. It has developed projects in Spain, the US, Chile, Italy and Mexico.
The company in May reported revenues of €15.8 million in the first quarter, up 198 percent year-on-year, and EBITDA of €7.3 million, 4.7 times that of a year earlier. These results were the result of the consolidation of its IPP business and the transfer of photovoltaic solar energy projects to Bruc Energy, according to a statement.
Confirmation
More take-private news now, and Alfa Financial Software, a UK-headquartered asset finance tech platform provider, said on Friday that it had received some unsolicited, non-binding proposals from EQT for a possible takeover.
The latest offer was for 208p per ordinary share in cash, with shareholders having the option to choose a partial unlisted share alternative offer. That would be for a total of around £615million ($774 million; €718 million).
EQT must make a firm offer by 7 July.
Swedish private equity firm EQT is also looking to take UK vet pharma company Dechra private – check out our recent coverage for more.
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