Good morning Eurohubsters, Craig McGlashan here with the midweek Dealflow.
With December nearly here, we’ve been sampling dealmakers’ views on the outlook for 2023, including which sectors are in vogue and which will struggle. We’ve got some of that for you this morning, as well as deals with a digitisation angle.
Taking off. Tikehau Capital is “really bearish about the macro situation” but is optimistic about specific sectors, Emmanuel Laillier, head of private equity, told PE Hub Europe.
Tikehau Capital’s private equity business has €4.7 billion of assets under management and focuses on growth equity, energy transition and green assets, aerospace, cybersecurity and special opportunities. It typically invests €20 million to €150 million alongside management teams, entrepreneurs and founding families who stay on as majority shareholders.
The aerospace sector suffered during covid thanks to the drop in global travel, but over a longer period, some investors have shunned the industry due to it falling foul of their ESG requirements, including because of its links to the defence industry. But since Russia’s full-scale invasion of Ukraine earlier this year – a major contributor to the slowdown in global growth – investors’ attitudes have changed, according to Laillier.
“Aerospace had difficulties during covid but the trend remains strong,” he said. “Our last fund was raised during covid. It was a very good entry point for the LPs. For a lot of investors then, fund of funds, aerospace was not ESG, as suppliers had 5-15 percent of their customers in the defence industry. But that was 2018 and that attitude has changed a bit.”
Tikehau is not alone in spotting that shift in attitude towards aerospace and, in particular, defence. The CEO of one private services firm told PE Hub Europe in the summer that since Russia’s invasion, “defence is no longer a bad word” and “the LP mindset towards defence has changed”.
In technology “it will be difficult for loss-making companies to find growth, but proven, profitable ones will be OK”, said Laillier. “The demand to digitise is here to stay, also as companies seek to improve profitability and find savings.”
You can read the whole of the interview here, including how Tikehau wants to replicate the US model of financing aerospace, as well as some of the other headwinds Laillier sees for investments and exits in Europe.
Setting sail. Keeping with that digitisation trend, Agilitas Private Equity today announced it had agreed to back the buyout of Saab’s Maritime Traffic Management business (MTM).
MTM’s products include the Vessel Traffic Management Systems MaritimeControl and the Coastal Surveillance System CoastWatch, which governmental agencies such as port authorities and coastguards use to monitor vessel traffic and aid the navigation of vessels in and around ports, coastal lines, and inland waterways. The firm is headquartered in Apeldoorn in the Netherlands.
“The commercial marine shipping sector is undergoing a significant digital transformation,” said Martin Calderbank, managing partner of Agilitas, in a statement.
MTM has been developing maritime software for over 30 years and its products are used by some of the world’s largest ports, according to the statement. It employs around 170 staff across offices in the Netherlands, Belgium, Canada and Hong Kong.
“The business benefits from a high degree of defensibility and offers significant transformation potential,” said Kevin Iermiin, partner of Agilitas, in the statement.
London-headquartered Agilitas is a pan-European, mid-market private equity firm founded in 2011. It grew its investment team by four people earlier in November.
Automation. Sticking with digitisation, Thoma Bravo-backed SMA Technologies, a provider of automation services for the finance sector, announced the acquisition of VisualCron.
Headquartered in Stockholm, VisualCron is an automation, integration and task scheduling tool for Windows environments. It provides an “easy-to-use” automation scheduling interface to streamline everyday tasks, saving time and reducing human error.
VisualCron complements SMA’s OpCon workload automation and orchestration platform that automates and manages workflows across business-critical operations from a single point of control, according to SMA.
Vision. We’ve been writing a lot lately about deals with links to central and eastern Europe – most recently about Actis’s launch of renewable energy platform Rezolv – and we have a bit more on that front today.
MidEuropa announced that it has entered into a definitive agreement to acquire a majority stake in Optegra Eye Health Care. The company’s management team are reinvesting alongside MidEuropa and the current sponsor, H2 Equity Partners.
Optegra is a European ophthalmology platform operating in Poland, Czech Republic, Slovakia and the UK. The London-based company offers a range of procedures including cataract, AMD, and vision correction for both public and private patients. Optegra operates 29 and performs over 100k surgical procedures per year.
Outdoor interest. Gresham House Ventures announced it has sold its equity stake in outdoor apparel manufacturer Equip Outdoor Technologies, realising a 6.9x money multiple to date on its original £4.45 million investment.
Derbyshire, UK-based Equip is an outdoor apparel manufacturer founded in 1993. The company’s portfolio includes two technical outdoor brands; Rab, which it has owned since 2003, and Lowe Alpine, which it acquired in 2011.
Final over. Given the reports earlier in the week of some private equity interest in cricket, we’re still on the lookout for cricket/private equity headlines – send your efforts to me at firstname.lastname@example.org and we’ll feature the best in this Friday’s Dealflow.
That’s it from me. I’m on holiday tomorrow so Nina Lindholm will be on Dealflow duty then I’ll be back on Friday.
But today we’ll both be at PEI’s Women in Private Markets Summit at the Royal Lancaster Hotel in London. Nina will also be there tomorrow.