Permira, Blackstone lead €12bn offer for Adevinta

GA sees digital potential for Joe & the Juice.

We’re starting with a look at what would be the biggest European take-private of the year so far, as Permira and Blackstone lead a consortium to buy Norwegian online marketplace group Adevinta. We’ll be focusing on how the offer’s premium stacks up against another big take-private offer for a Norwegian business this year – edutainment company Kahoot.

Next up, Nina Lindholm speaks to General Atlantic’s Melis Kahya Akar to find out the private equity firm’s plans for Joe & the Juice, in which it agreed to take a majority stake last week.

We then finish on another hopeful sign for the exit market, as Partners Group sells a cloud services business to Blackstone.

Bumper deal

What would comfortably be the biggest take-private in Europe this year took a step forward late yesterday, as an offer led by private equity firms Permira and Blackstone and including General Atlantic and TCV made an offer for all the class A shares in Adevinta, an online marketplace group headquartered and listed in Oslo.

The NKr115 per share offer gives Adevinta a market capitalisation of around NKr140.9 billion ($13.1 billion; €12.1 billion). It also offers a premium of 52.6 percent to the average price over the three months to 21 September, when Adevinta first made the private equity interest known.

The company is predicting EBITDA of €620 million to €650 million in 2023, with annual revenue growth of 11-15 percent from 2023-26. It expects an EBITDA margin of 40-45 percent in 2026.

Adevinta’s board said that it had unanimously agreed that Adevinta can generate more value than that offered by the consortium, meaning it couldn’t make a recommendation on whether to accept the offer to shareholders looking at the long term.

But it added that as the cash consideration was “within the range of what is fair”, with the 52.6 percent premium being in the range of other recent public offers in Norway, “it may represent an attractive opportunity for shareholders who are looking to monetise their investment in the short term”.

For instance, in July the board of Norwegian game-based learning company Kahoot agreed a take-private with Goldman Sachs Asset Management and co-investors including General Atlantic, KIRKBI Invest and Glitrafjord at an offer price of NKr35 per share, which was a premium of 53.1 percent to the closing price before the shareholding positions of the co-investors were publicly disclosed in May. It offered a premium of 33.3 percent over the three-month period up to the announcement of the offer and 62.1 percent over the six-month average to that point.

Summing up, the Adevinta board said that shareholders should take their own view on the offer.

Some of the company’s largest shareholders are already on board.

eBay, which owns 33 percent of Adevinta, said it will sell half of its shares and would exchange its remaining shares for a 20 percent holding in the newly privatised company. Schibsted, from which Adevinta was spun-off in an IPO in April 2019 that valued the company at NKr53 billion, said it would sell 60 percent of its 28.1 percent stake, leaving it with 13.6 percent indirect ownership in the business.

Permira itself is the company’s third largest shareholder, at 11.2 percent, meaning that the consortium has effectively secured 72.3 percent of the outstanding equity.

Going digital

General Atlantic’s agreeing a majority stake in Joe & the Juice, a juice bar and coffee company headquartered in Copenhagen, drew plenty of interest when we covered the deal last week, so Nina Lindholm spoke to the private equity firm’s managing director and head of consumer for EMEA to find out more about its plans for the business.

A lot of growth could come from the digital side of the business, Melis Kahya Akar told Nina, which it has built up since becoming a minority investor a few years ago.

“When we invested in 2016, our digital offering was nascent, whereas today, the delivery app and digital side drive about 30 percent of the business,” said Akar. “That really kicked in during covid in 2020. We believe there is potential for that to go up to about 50 percent in the next phase of growth.”

Growth in the physical business will come geographically, with GA seeing the franchise model as a source of growth.

Last year, GA trialled franchise operations in the Middle East, where “we felt partners would know the territory better than us”, said Akar, adding that units in the region are performing particularly strongly.

“We see new franchise opportunities down the road, including in newer territories such as Latin America and Asia.”

Check out the full article to learn about how the business is faring as inflation eats into consumers’ spending money.

Cloud exit

We’re seeing some signs that the exit market is picking up, with another deal announced today.

Partners Group has agreed to sell Civica, a cloud software service provider for the public sector, to Blackstone.

Partners Group acquired London-based Civica in 2017. Civica’s EBITDA doubled during that time.

“Our value creation plan centred around moving Civica in the direction of a pure software solutions business and embracing the shift to cloud, which is important for its client base,” said Bilge Ogut, partner, head private equity technology industry vertical, Partners Group.

Partners Group’s investment accelerated organic topline growth, developed a cloud offering, built out its offshore R&D operations and executed 24 highly complementary add-on acquisitions, according to a release.