Permira preps GenAI, M&A and commercial investment for Ergomed

PSG enters race for SmartSpace.

We have a take-private theme today, as I speak to Permira’s Florian Kreuzer and Peter Michel about the private equity firm’s plans for pharma services company Ergomed.

Next, we look at a rival private equity offer that has come in for listed space management software company SmartSpace. We then take a brief look at Kahoot as Goldman Sachs Asset Management completes its acquisition of the company.

Moving away from the public markets, we have a deal in the media sector, where Hg has made another sale despite the tough prevailing exit conditions. General Atlantic is also involved in that deal.

Then we finish with news that Level 20, a group set up to boost women in private equity, has a new chair – which gives us a great opportunity to announce our next women in private equity series.

Consolidation

I caught up with Permira to find out its plans for Ergomed, a pharma services company the private equity firm took private late last year.

There’s a three-part plan: invest in the commercial team and refine the go-to-market strategy; accelerate automation and adopt generative AI; and consolidate its fragmented sector, principals Florian Kreuzer and Peter Michel told me.

Permira completed the take-private of Guildford, UK-based Ergomed in November for £703 million ($893 million; €818 million), entering sectors with a combined total addressable market of over $35 billion, said Michel.

Ergomed operates in the asset-light pharma services sector, which has strong organic growth, high cashflow generation and M&A consolidation potential, he added.

The commercialisation strategy for growth features different tactics for each business segment.

“On the PV side, the goal is to help the management team expand the share of wallet within existing customers while improving the go-to-market execution to accelerate customer growth,” said Kreuzer. “On the CRO side, the goal is to accelerate the commercial momentum to harness Ergomed’s therapeutic area differentiation and accelerate growth by further scaling into a massive market.”

The automation and AI element will aim to improve competitive advantage and drive cost efficiencies, while the M&A strand will look to strengthen the existing PV and CRO businesses and add adjacent capabilities.

Check out the full interview for more on Permira’s plans for Ergomed, why it was attractive relative to its peers and how it came up with the valuation.

Space management

Speaking of consolidation, a pair of private equity firms are now vying to take London-listed space management software company SmartSpace private, after PSG Equity-backed competitor Sign In Solutions made a non-binding indicative proposal for the London-listed company.

The SmartSpace board said it was “minded unanimously” to recommend the 90p per share offer. That would value the total issued equity at around £26 million.

SmartSpace’s share price jumped on the news but was still some way off the potential offer price, hovering around 81.5p at time of writing, having closed last week around 68p.

The board of the company, which has offices in the UK, US and New Zealand, had already been mulling interest from rival Skedda, a space management company based in Australia and backed by Five Elms Capital. Its offer was for just 82p per share.

Sign In Solutions has offices in the US, Canada, UK and Denmark.

Canaccord Genuity is financial adviser and corporate broker for SmartSpace.

Game over

Goldman Sachs Asset Management’s take-private of Norwegian game-based learning company Kahoot is complete, with today the last day of trading on the Oslo Stock Exchange.

GSAM made a NKr17.2 billion ($1.6 billion; €1.5 billion) offer for the company back in July.

Exit open

While the exit environment remains tricky, one private equity firm has notched up another sale.

General Atlantic will make an additional investment to acquire a minority stake in the Argus Media Group, a market intelligence provider, which will see Hg fully exit its minority position.

Adrian Binks, chairman and chief executive of Argus, will continue to lead Argus and will become the majority owner of the company.

Argus is headquartered in London. It has over 11,000 customers in more than 160 countries, providing price assessments, news, analytics, consulting services, data science tools and industry conferences to the global energy and commodities markets.

GA initially bought its shares in Argus in 2016. Hg invested in the company in January 2020, acquiring half of GA’s stake. GA transitioned the remainder of its stake into a continuation fund in 2021 and is investing additional capital from this fund to increase its ownership.

Hg has been busy with sales over the last couple of months. In January it closed the sale of the MeinAuto and Mobility Concept divisions of MeinAuto Group to Mobilize Lease & Co, a subsidiary of Mobilize Financial Services, part of the Renault Group.

The firm also agreed in December to sell German insurance broker GGW Group to Permira at what PE Hub Europe understands was a €2 billion enterprise value.

Another level

Finally, Level 20, an organisation that aims to inspire women to join the European private equity industry, has appointed Rebecca Gibson as chair.

Gibson has over 20 years’ experience in private equity. She has been an investment partner at Oakley Capital since 2014.

She replaces Cheryl Potter, who was chair for three years and will stay on the Level 20 board.

That’s a great news hook for us to announce that we’ll be running another series of interviews with women in private equity in March to coincide with International Women’s Day.

If you’d be interested in being interviewed, please get in touch with PE Hub Europe’s Nina Lindholm.

In the meantime, definitely check out our series from 2023. You can see all the interviews here.