Silver Lake’s pursuit of Germany’s Software AG has had a boost after Bain Capital portfolio company Rocket Software, which had also been interested in buying the company, agreed to sell its stake to the private equity firm.
Next, Nina Lindholm spoke to Earth Capital about its investment in aquaculture technology company Ace Aquatec.
We then feature Andera Partners and IDI exiting a composite material company, before we look at the latest reports of European Union antitrust scrutiny.
Rocket out
Bain Capital portfolio company Rocket Software has dropped its pursuit of German tech business Software AG, agreeing late yesterday to sell its stake to its former rival Silver Lake.
Rocket will sell its stake of just over 10 percent for €32 per share, in line with Silver Lake’s tender offer. That takes Silver Lake’s holding to 41 percent, excluding its convertible bonds which could convert into 10 percent of total current share capital.
Silver Lake last week dropped its minimum threshold of 50 percent plus one share and extended its offer period by two weeks to 28 June. It also said it would be comfortable being a minority shareholder, although Rocket’s latest decision means it is now a good bit closer to hitting majority control.
Rocket had actually made a higher, albeit non-binding, offer for Software AG, but the latter’s board preferred the Silver Lake option – a decision that led some investors to protest.
Rocket alluded to that in its statement yesterday, pointing out that it had not been “granted the opportunity to evaluate such a combination with the management board and transaction committee of Software AG”. It added that the sale of its stake to Silver Lake was part of continuing its “friendly posture”.
Rocket’s owner Bain Capital has since made another take-private play in the tech sector, making an indicative, unsolicited and non-binding offer for SoftwareOne, a Swiss company.
Aquaculture
The fishing industry is a big part of the economy and culture of the west coast of Scotland, so as a native of that part of the world I was super keen to read Nina Lindholm’s interview with Earth Capital about its investment in aquaculture technology company Ace Aquatec.
The company makes in-water electric stunners, marine mammal protection devices, biomass cameras and sea lice removal systems for customers such as fish farms. It is based in Dundee (which for geography fans, is on the east coast of Scotland).
Earth Capital invested in Ace in early June, joining existing investors Aqua Spark and Chroma Ventures.
Technologies such as those produced by Ace Aquatec have had a huge impact on the fish sector, Earth Capital senior investment manager Bradley Jones told Nina.
“Around 10 years ago, about five billion tonnes of fish were consumed by humans. Through aquaculture techniques, that’s gone up to over 65 billion.”
But it’s not just the quantity that’s risen – so have concerns about the ethical treatment of animals.
Technologies focused on fish welfare, developed by Ace Aquatec, helped draw Earth Capital to the company.
An underwater camera developed by Ace, A-BIOMASS, is one of the ways the company is reducing the need for manual interaction. Through machine learning, AI identifies fish and critical points, such as tail and fins, to measure fish height, weight and length. “They are using AI to train that tool get it more accurate,” Jones added.
Ace operates globally, with offices in Scotland, Norway, Canada and Chile. Expansion plans will have a particular focus on Chile and the APAC region, according to Jones. The latter is driven by UK supermarkets, which are very stringent on the treatment of the fish they sell. “Farmers in Southeast Asia have had to really up their game to make sure those UK supermarkets are satisfied,” said Jones.
Check out the full interview for more on how Earth Capital plans to help Ace Aquatec grow.
Earth Capital is not the only private equity firm interested in aquaculture lately. Goldman Sachs Asset Management is looking to take Frøy, a provider of services to Norwegian salmon farmers, private, for instance.
Tyring out
Andera Partners and IDI have agreed to exit their investment in Flex Composite Group (FCG) to tyre giant Michelin for an enterprise value of €700 million.
FCG designs, manufactures and distributes advanced composite materials. The company has three brands – ORCA, Fait Plast and Angeloni. It has sales offices in Europe, the US and China and six production centres in Belgium and Italy.
FCG reported €202 million in revenue in 2022 and delivered an average organic growth of 11 percent, with 25-30 percent EBITDA margin over the 2015-2022 period.
Andera and IDI will realise an investment multiple greater than 12x on the investment, according to a release.
Andera acquired FCG in September 2015 in an LBO carried out alongside IDI.
FCG’s addition will grow Michelin’s high-tech materials revenue by around 20 percent, the release added.
Antitrust
I’m going to go slightly off brief to round things off today by mentioning a deal involving two US companies – but with a European regulatory bent.
Software company Adobe’s $20 billion move for competitor Figma is likely to face a long antitrust investigation in the European Union, according to four people with direct knowledge of the move spoken to by the Financial Times.
That EU authorities are taking greater interest in potential antitrust cases is something that many M&A lawyers have warned will likely impact private equity more and more.
Yesterday, we touched on that in the Dealflow as we reported on the latest in Triton Partners’ seeking merger control clearance for its take-private of Finnish construction company Caverion.
As an M&A lawyer told me earlier on in Triton’s pursuit of Caverion: “This does go to a very interesting issue, namely the way in which antitrust authorities are now thinking about private equity sponsors, and specifically whether interests held in different funds or through different structures can be considered to be independent if there is common ownership at the top of the chain.
“This will be an emerging theme on both sides of the Atlantic in the next couple of years.”
You can read more about the such antitrust concerns through the prism of Triton’s move for Caverion here.
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