It looks like a bell-curve of a week news-wise because we have a tonne of stuff to tell you about today.
First up, Nina Lindholm takes a deep dive into Permira’s move for luxury fashion manufacturing hub Gruppo Florence, including how the firm plans to navigate the sector’s evolving supply chain.
Take-privates are the next theme, as we look at the latest on EQT’s move for Alfa Financial Software, Goldman Sachs Asset Management’s pursuit of Frøy and Blackstone’s bid for Industrials REIT.
We also have a snippet about a rebranding at a European private equity firm.
Today’s deals include an exit by EQT from a provider of validation and monitoring products and services for the biotech and pharma sectors, and Stirling Square Capital Partners buying a majority stake in a provider of software services for the construction industry from Summa Equity.
Finally, I’m working from Vilnius and stayed up late to watch the Scottish men’s football team keep up their remarkable run of victories last night – a game that was delayed by nearly two hours because of torrential rain. That, coupled with Lithuania being two hours ahead, means I’m a little sleepy this morning.
I was wondering how I could possibly shoehorn those two seemingly irrelevant facts into the Dealflow, so imagine my delight when I learned that Innova Capital is going to acquire a majority stake in a distributor of specialised equipment for football enthusiasts, professionals and football clubs in Central and Eastern Europe that is headquartered across the border from where I am now.
The disruption of supply chains, particularly during the covid pandemic, and attempts to re-shore production and improve sustainability have been a big theme of many of the deals we’ve covered here on PE Hub Europe, such as Carlyle’s interest in optic company Meopta, which has an important place in the microchip production process.
This topic seems to touch all sectors, including fashion.
Today, PE Hub Europe’s Nina Lindholm has an interview with Permira partner Francesco Pascalizi and principal Giorgio Dinaro about the firm’s agreement to acquire Milan-based Gruppo Florence, an Italian integrated manufacturing hub for the luxury sector.
“Fifteen years ago, a stable supply chain was more or less taken for granted,” said Pascalizi. “Just before and throughout covid, the value suppliers bring to the table – and the pain they cause if not well managed – became very evident.”
London-headquartered Permira’s previous investments in luxury brands include footwear brand Dr Martens, which went public in 2021, and Golden Goose, a luxury trainer brand it acquired in 2020.
The experience of those deals, along with the understanding of the critical nature of the supply chain, helped Permira to appreciate the quality and value of the Gruppo Florence platform, according to Dinaro.
Permira expects the B2B luxury market to consolidate due to several factors, including luxury brands’ increasing focus on sustainability and the need for faster lead times. “In this context, Gruppo Florence is the only player of scale,” Pascalizi added.
While the luxury B2B is a large industry, it is mostly served by SMEs and family-owned businesses, Pascalizi said. “Sustainability is a space where the SME model reaches its limits,” he said, “because you need to invest in R&D, something that a small, family-run business is not accustomed to.”
Read the full interview to learn about Permira’s M&A strategy for Gruppo Florence.
EQT has made progress in its take-private move for UK-headquartered asset finance tech platform provider Alfa Financial Software. The Stockholm-headquartered private equity firm has entered into an irrevocable undertaking with CHP Software and Consulting, which is controlled by Andrew Page, the founder of Alfa.
That would see EQT take a share of around 59.5 percent in Alfa.
The undertaking means that CHP will, if EQT makes a firm offer, vote in favour of EQT and also vote against any competing bid. EQT must make a firm offer by 7 July. The undertaking will terminate if a third party makes a firm intention to offer at a share price of 239p or greater and EQT does not match or beat the bid.
EQT’s latest unsolicited, non-binding proposal was 208p per share, Alfa announced a couple of weeks ago. That would value the total outstanding equity at around £615 million ($671 million; €563 million).
Alfa shareholders will also be able to rollover shares into a holding company controlled by EQT in exchange of their shares of up to 33 percent of their shareholding, with the remainder settled in cash. CHP has chosen that proposal, up to the maximum of 33 percent.
Sticking with take-private news, and Goldman Sachs Asset Management has received approval from the Norwegian Competition Authority and received an exemption from the Norwegian Ministry of Trade, Industry and Fisheries for its move to buy NTS’ stake in Norwegian salmon farmer service provider Frøy, which is about 72 percent of the company.
GSAM is now waiting for approval from competition authorities in Ukraine before the deal can complete.
You can read full details on Goldman’s offer in our earlier coverage here.
For more on private equity interest in the fishing sector, check out Nina Lindholm’s interview with Earth Capital about its investment in Ace Aquatec here.
Finally in take-private news, a court yesterday sanctioned Blackstone’s take-private move for UK property company Industrials REIT. The board of Industrials REIT agreed Blackstone’s bid of 168p per share, which values the company’s outstanding stock at £511 million, in March. PE Hub Europe understands though that the total enterprise value, including debt, is around £700 million.
Applications have now been made to suspend public trading in the company’s shares.
Mid-market private equity firm Ergon Capital is now known as Apheon.
Apheon manages around €2.5 billion through its flagship and single asset funds. It invests primarily in companies headquartered in the Benelux, France, Germany, Italy and Spain.
The firm has offices in Amsterdam, Brussels, Luxembourg, Madrid, Milan, Munich and Paris.
Some more news on EQT now. The firm, together with its co-shareholders, has agreed to sell Ellab, a Danish provider of validation and monitoring products and services for biotech and pharmaceutical processes, to Novo Holdings.
EQT Private Equity invested in Ellab in 2019.
Ellab has tripled its revenues, EBITDA and number of employees, and has seen around 20 percent annual organic revenue growth during EQT’s ownership, according to a release. It has completed 15 add-on acquisitions.
“The difference now is the scale and flexibility that Ellab offers, as it has transformed into a full-suite provider of validation and monitoring solutions and services,” said Rikke Kjær Nielsen, partner, EQT Private Equity’s advisory team.
Ellab shifted its customer focus towards high-growth industries such as biotech, cell and gene therapies, and contract development and manufacturing organisations during EQT’s ownership, the release said
Stirling Square Capital Partners will buy a majority stake in Infobric, a provider of software services for the European construction industry, from Summa Equity.
Infobric is headquartered in Jönköping, Sweden. The company has a suite of SaaS products.
This transaction, which is a growth investment, has a significant employee ownership component and was the result of an auction process, PE Hub Europe understands.
Summa will re-invest as a minority investor alongside Stirling Square, and Infobric’s management team.
And finally, I’m delighted to have a football-related deal to report after another majestic win by the Scotland men’s team last night (although the weather meant at times it looked more like water polo).
Innova Capital will acquire a majority stake in R-GOL, a distributor of specialised equipment for football enthusiasts, professionals, and football clubs in Central and Eastern Europe.
R-GOL is headquartered in Ostróda, Poland and employs more than 150 people. The company expects about PLN 250 million (€56.28 million; $61.43 million) in revenue.
Marcin Radziwon, R-GOL’s founder, will continue as CEO and shareholder.