Partners Group sees software sale flurry in 2024

Bridgepoint agrees stake in testing service provider.

As next year should see a flurry of software company sales, according to Charles Rees of Partners Group, the timing of his private equity firm’s exit from Civica was partly to avoid that rush in 2024. If exit activity does pick up next year it’ll be a welcome development for dealmakers given the difficulties of selling investments this year.

Elsewhere, Bridgepoint has agreed to acquire a majority stake in a service provider for the testing, inspection and certification market – we’ve got the deal size on that one for you.

We then turn back to the hot market of sports as we look at a report from law firm RPC that shows the rise in investments in European football teams and leagues, before we have an update on Thoma Bravo’s take-private of corporate comms and compliance business EQS.

Beat the rush

We’re going to have plenty of interviews coming up with leading dealmakers about the outlook for private equity in 2024. But in an early taste of things to come, Charles Rees, member of management, private equity technology industry vertical at Partners Group, told PE Hub Europe’s Nina Lindholm that his firm’s sale of Civica was partly timed to beat a rush of software assets coming to market next year.

The private equity firm agreed to sell Civica, a cloud software services provider to the public sector, to Blackstone in late November for what a source familiar with the matter said was around $2.5 billion.

That let Partners get ahead of “a very healthy pipeline”, particularly in sponsor assets, that is “bigger than we had entering this year”, said Rees.

“With the unique asset we had we thought we’d get more attention and perhaps even a bit of scarcity premium coming to the market now versus next year.”

The slow exit environment called for some planning to get the sale in before year-end. “There has been a return to longer sales processes,” said Rees.

Check out the full interview to hear about how Partners Group adapted Civica to a much “cleaner software business” and about its international expansion.

Rees is not alone in expecting a pickup in exits next year. The private equity team at investment bank Peel Hunt told me a couple of weeks ago that while they haven’t seen a rise in exits yet, one should come given the desire from LPs for cash returns, aging portfolios and 18 months of muted exit activity.

Testing time

Sticking with deals linked to the public sector, Bridgepoint, via Bridgepoint Development Capital IV, has agreed to acquire Capita’s 75 percent stake in Fera Science. The transaction values Fera at £80 million (€93.3 million; $101.6 million).

Fera was established in 2015 as a joint venture between Capita and the UK’s Department for Environment, Food & Rural Affairs (Defra). Defra will retain its 25 percent shareholding as part of the transaction.

Fera provides services to the testing, inspection and certification market, which is forecast to grow at 6-9 percent over the medium term, according to Bridgepoint.

Mat Legg, partner at Bridgepoint Development Capital, said that the combination of climate change, biodiversity awareness, changing customer habits and the need to feed a growing global population are leading to new, more sustainable agricultural practices, product innovations and increased government regulation to protect agricultural environments. That all requires testing and research services to determine the standards which producers should follow.

Note – Bridgepoint owns PEI Group, the publisher of PE Hub Europe.

In form

European football is still enjoying rich interest from investors, with deals for clubs and leagues up 29 percent over the last year, according to research from international law firm RPC released this morning. Thirty-six deals were concluded in the year up to 18 October, up from 28 the previous year.

Private equity and sovereign wealth funds drove the increase. Deals include those at all levels of the football pyramid, such as 777 Partners agreeing to acquire England’s Everton – although there have been reports including from Bloomberg that the deal is coming under scrutiny by football authorities – and LBK Capital looking to play the “nascent asset class” of football transfers with third-tier Italian club Triestina.

Other firms have sought to gain exposure to football via more indirect routes, such as Raine Group leading a £145 million funding round last week in Castore, a sportswear brand and retailing platform that includes several European clubs on its client list.

We’ll have an interview about the deal with James Schretter, Raine partner, going live on PE Hub Europe later this week.

Tendering

And finally, Thoma Bravo has launched the tender process for its €400 million take-private move for German corporate comms and compliance company EQS.

Thoma Bravo already owns 9 percent of EQS’ shares but taking irrevocable undertakings and other factors into account, the private equity firm has secured about 69 percent of the company.

You can read more about the offer, including the premium and Thoma Bravo’s plans for the business, in our earlier coverage.

Tech-focused Thoma Bravo also announced this morning that it had completed the sale of Imperva, a cybersecurity company based in San Mateo, California, to French multinational Thales for $3.6 billion.

The firms announced the deal back in July. You can read more on that in our US colleagues’ coverage on PE Hub at the time.