PE Hub Europe’s top 10 of 2023

PSG and Riverside’s 2024 tips; Mutares reveals Prénatal plans.

To celebrate the end of what has been a challenging year, we’ve rounded up our 10 most-read stories of 2023, covering topics such as the difficult exit market, novel approaches to financing, DE&I and of course deal write-ups.

We then look ahead, where we get the 2024 outlook on dealmaking from PSG’s Dany Rammal and Riverside Europe’s Karsten Langer.

One more deal deep dive for 2023 follows, as Nina Lindholm speaks to Mutares’ Jurjen Soppe about the firm’s plans for maternity and childcare company Prénatal plus we have a fresh deal as Bridgepoint enters talks to buy Nexity’s residential property management services business.

We then round things off with an update on the Permira- and Blackstone-led take-private of Norwegian online marketplace Adevinta.

We’ve also got some more deals that we don’t have time to cover in the chat that you can read more about in the deals section below.

The top 10 of 2023

It’s that time of year for rounding up the most-read stories of the year, so I’ve collected PE Hub Europe’s top 10. Rather than providing a countdown though, I’ve grouped them in terms of theme – so in no particular order, here we go…

Hold on…

It’s been no secret that exit conditions have been less than stellar this year. BC Partners chairman of Europe Nikos Stathopoulos told me that firms were holding assets for longer amid “the lowest deal volumes and deal values in the private equity industry that I can remember for at least a decade”.

Take-privates

On top of our coverage of individual take-private deals, we’ve looked at some of the thematic issues involved. That included our coverage of Bain Capital and Triton Partners battling it out for Finnish construction company Caverion – and whether it was a harbinger of antitrust scrutiny to come.

Our other most-read take-private story was around financing such deals – a topic relevant not just to P2Ps but all private equity deals in 2023, of course. This article looked at the creative ways sponsors were approaching financing.

Generative AI

No 2023 rundown would be complete without a mention of generative AI and two articles on the subject made the top 10. We wrote about Partners Group deploying generative AI and BC Partners using the tech for its deal sourcing.

DE&I

This year we marked International Women’s Day in March and Pride Month in June with a series of interviews with women and LGBTQ+ dealmakers. One of each series made the top 10.

Blackstone’s Natacha Jamar told Irien Joseph in March that DE&I is a huge priority for the firm and its portfolio, while in June Motive Partners’ Rob Heyvaert told Nina Lindholm that the private equity industry still has a “long way to go” for people in the LGBTQ+ community to truly feel welcome and comfortable.

Just deals

Two deal writeups also made the cut. One was Permira taking a majority stake in Acuity Knowledge from Equistone and the other a deep dive interview with Aurelius Private Equity founding partner Dirk Markus on his firm’s carve-out of airline caterer and onboard retail provider LSG Group International from Deutsche Lufthansa.

Location location location

The final article that made it into the top 10 was one of our popular listicles – this one on private equity firms adding London offices to their footprints.

Dealmaking ahoy

Switching from a lookback to a lookahead, and the strong sense we’ve been getting as we’ve run our Q&A outlook series with leading dealmakers is that there should definitely be an uplift in deals in 2024 – no doubt helped by further signs that central bank rates have peaked and could begin to fall next year.

That was the takeaway from the two Q&As we’re running today – even though each private equity firm had a different experience of 2023.

A rise in dealmaking in the fourth quarter of 2023 will likely accelerate into 2024, said Dany Rammal, managing director and head of Europe at software-focused growth investor PSG.

Of the five platform investments PSG made in Europe in 2023, three came during the fourth quarter, highlighting how dealmaking was opening up, said Rammal.

“Towards the end of 2023, we saw a pickup of investment activity as market valuation corrections and macro factors, such as the cost of debt and geopolitical risks, were broadly priced in and had somewhat stabilised. This enabled more buyers and sellers to find mutually agreed valuations that reflect the new environment. As a result, we started to see founders and sellers bringing high-quality assets to market, either to look for funding to accelerate growth and/or to pursue strategic M&A. We expect this trend will accelerate in 2024.”

Here’s the full interview, including Rammal’s take on generative AI and whether there will be a focus on profitability over growth next year.

Slow second half

Riverside Europe had a different experience of 2023, however, with its European deals coming in the first half – but has a similar outlook for 2024, according to managing partner Karsten Langer.

“We do expect a pickup in dealmaking in 2024. 2023 saw deal numbers decline significantly, especially at the larger end of the market, but I expect that buyers, sellers and lenders will eventually start to find each other again in 2024.

“During the second half of 2023, seller expectations remained high, while on the other side buyers seem to believe that prices should be dropping, so we have a situation where the two don’t meet as often as you would expect. However, we are now starting to see that gap in buyer and seller expectations closing, with on the one hand sellers realising that peak valuations are no longer realistic and, on the other, buyers realising that the future is not as bleak as they may have expected.”

Read more for Langer’s outlook on the lower mid-market and how the exit environment will be in 2024.

Dutch double down

We’ve got one last deal deep dive to give you before we break for the end of the year.

Mutares will primarily focus on strengthening Prénatal’s position in the Netherlands with an opportunistic view on M&A, while navigating the uncertain retail segment, Jurjen Soppe, managing director and head of Benelux, told PE Hub Europe’s Nina Lindholm.

Prénatal is a retailer that provides maternity, baby and infant clothing, childcare products and hard goods, as well as toys. It is based in Amersfoort and generates revenues of around €100 million. In the Netherlands, Prénatal consists of Prénatal Moeder en Kind and its 100 percent subsidiary WIJ Special Media.

Mutares agreed to acquire Prénatal’s stores and ecommerce activities in the Netherlands from PRG Retail Group in November.

In residence

Bridgepoint has entered exclusive talks to buy 100 percent of Nexity’s residential property management services business at an enterprise value of €440 million.

Nexity is a real estate operator based in Paris. The planned strategic partnership agreed by Bridgepoint and Nexity would allow all the activities involved (joint property management, lease management, property rental and sales and insurance brokerage) to continue their development, according to a press statement. Nexity had €4.7 billion in revenue in 2022.

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

Kicking off

The Permira- and Blackstone-led €12 billion take-private of Norway-HQ’d online marketplace Adevinta moved forward this morning after the Oslo Stock Exchange approved the offer document, starting the offer period.

The investor group, which includes General Atlantic and TCV, already has agreements in place to control 72.3 percent of Adevinta’s issued shares, according to the statement this morning.

The offer period ends on 24 January.

For more on the financials, premiums and everything else, check out our coverage of the offer announcement in November.