Searchlight gains final sign-off for Gresham House

Syncona in for biotech biz; Peel Hunt tips exit pickup.

We’re opening things with a look at Searchlight Capital Partners’ take-private of Gresham House, which has just cleared its final regulatory hurdle. We’ll also chat a little bit about how European deals don’t seem to be getting held up at that stage to quite the same degree as in the US.

Next, we’ve got another take-private as Syncona looks to buy the half of a biotech company it doesn’t yet own.

We then roundup some of the exits we’ve seen this week and get the thoughts of the private equity team at Peel Hunt on whether the exit market is fully reopening.

Finishing off, we look at a deal in the Baltics involving INVL Baltic Sea Growth Fund and a producer of buckwheat, flakes, rice and other groats.

Final approval

There’s ever more news about regulators taking a look at private equity deals to see whether they fall foul of competition rules. Just this week, Politico reported that the US Federal Trade Commission was looking into Roark Capital’s move to buy sandwich giant Subway, while Welsh Carson has asked a federal judge to throw out the FTC’s antitrust lawsuit against it over its investment in US Anesthesia Partners.

Over here in Europe though, we haven’t seen too many deals being held up by regulators. Even Triton Partners’ take-private of Finnish construction company Caverion, which rival bidder Bain Capital had argued could be caught up in competition scrutiny, won its final regulatory approval in October after a short delay to divest a business unit.

This morning, another take-private cleared its final regulatory hurdle, as the Central Bank of Ireland signed off on Searchlight Capital Partners’ take-private of alternative asset manager Gresham House, which values the UK-based company at an enterprise value of £441 million ($535 million; €507 million).

For more on the motivations behind that deal as well as Searchlight’s plans for the business, check out this interview with Searchlight founding partner Oliver Haarmann.

Biotech

In other take-private news, Syncona – via a newly established portfolio company – has agreed to buy all the shares of Freeline Therapeutics Holdings in an all-cash transaction.

Freeline is a clinical-stage biotechnology company based in Hertfordshire in the UK.

Syncona currently owns 49.7 percent of Freeline’s shares.

The portfolio company will acquire Freeline for $6.50 in cash for each Freeline American Depositary Share. This price values the entire issued share capital of Freeline at around $28.3 million and represents a 50 percent premium to Freeline’s closing price before the announcement on October 18 of Syncona’s initial proposal to take Freeline private.

Exits imminent

We’ve seen a healthy run of sales this week, which made me wonder whether the exit market was getting back to full health.

Not just yet, according to one investment bank I asked – but it should do soon.

The private equity team at Peel Hunt said that while they haven’t seen a pick-up in exits, an increase must come, considering the desire from LPs for cash returns, aging portfolios and 18 months of muted exit activity.

Some of the exits this week include Partners Group agreeing to sell UK cloud company Civica to Blackstone – we understand the deal size was around $2.5 billion – Cibus Capital selling Spanish olive oil business Innoliva Group to Fiera Comox Partners and Triton Partners signing a deal to sell Fonecta, a part of European Directories Group (EDSA), to Sponsor Capital and others.

Other private equity companies are selling businesses but reinvesting for minority stakes, like Apheon did this week as Astorg took a 51 percent stake in its portfolio Sofico, a Belgian software provider to the auto leasing industry.

You can read more on some of the motivations behind that tactic in this feature.

Food for thought                                                                            

INVL Baltic Sea Growth Fund has agreed to acquire a 100 percent stake in Galinta Group, a buckwheat, flakes, rice and other groats producer in the Baltics.

Kaunas-based Galinta generated around €38.5 million of revenues in 2022. Its buckwheat production capacity reached 1,000-1,500 tonnes per month and packaging reached around 8 million units per month.

“We believe that the plant-based food sector has strong potential for growth and Lithuania demonstrates a competitive advantage in the field of food processing, especially in the grain segment,” said Deimantė Korsakaitė, managing partner of INVL Baltic Sea Growth Fund. “The business has the potential for rapid growth by both increasing volumes in existing markets and expanding into the new ones as well as the launch of new product segments.”