It’s a take-private Tuesday here on PE Hub Europe as we have a couple of updates for bids we’ve been following. First up, Permira has completed the acquisition of a London-listed service provider to the pharmaceutical industry.
Then we have an update on Xenon Private Equity-backed Microtest’s bid for a Dutch semiconductors supply and testing specialist.
To finish, we’ll move away from take-privates, and take a look at global private equity deal value figures, which show a downward trend.
Let’s kick off with the big one. Permira has completed the take-private of Ergomed, a service provider to the pharmaceutical industry, for £703 million ($864 million; €807 million).
Ergomed is a pharmacovigilance (PV) and contract research organisation (CRO) business. The company is based in Guildford, UK.
“Permira brings operational expertise, a global network, capital and, equally importantly, a like-minded approach to how to accelerate our growth,” said Miroslav Reljanović, executive chairman of Ergomed. “We believe the acquisition will significantly increase our ability to invest in our geographical expansion, commercial infrastructure, and technology, and to execute strategic M&A in both the CRO and PV businesses.”
In early September, the Ergomed board unanimously recommended that shareholders vote in favour of the deal. At the time, Permira justified the offer by stating that Ergomed “is a differentiated platform in the outsourced pharma services sector”, operates in structurally growing markets, and believes the company is better placed to achieve its potential as a private company.
I recently spoke with Dechert partner Christopher Field about the law firm’s sixth annual Global Private Equity Outlook report.
Take-privates were a significant part of our conversation, and Field explained that in general, private equity is more “comfortable” with doing take-privates, partially due to increased regulatory overlay. Some of it is also due to a bit of a snowball effect. “There’s a momentum element to it,” Field told me. “As you see the first one’s being done, you ask yourself: ‘Shouldn’t we be doing this as well, if other firms can successfully execute on this?’”
One step closer
Our next bit of take-private news is not yet a done deal, but one edging closer to completion. Xenon Private Equity-backed Microtest will hold 95.09 percent of RoodMicrotec shares after settlement of post-acceptance period.
As a result, Microtest and RoodMicrotec intend to procure the delisting of the shares on Euronext Amsterdam “as soon as possible” under the applicable rules.
Microtest, an Italy-based microelectronics testing specialist, in June agreed a €0.35 offer with the board of Netherlands-headquartered semiconductor supply and quality services provider RoodMicrotec. The deal valued the total equity of RoodMicrotec at €28.9 million.
Let’s take a look at some deal value figures next. According to a report from S&P Global, monthly deal value has been on a downward trend since August.
Private equity and venture capital investments sank further in October, with aggregate transaction value totalling $27.1 billion, down 36.1 percent from $42.4 billion in the same month a year ago, the report said.
Number of transactions dropped to 908 from 1,241 during the measured period, the report added.
The most invested sector in October was technology, media and telecoms – in which application software recorded the highest number of deals. Even within that segment, deal count went down from October 2022’s 258 deals to 155. The systems software and interactive media and services subsectors saw 40 and 31 deals, respectively, also down on an annual basis, the report said.