Technology – a sector we tend to see a steady stream of deals in – is in the spotlight this morning, but with a Nordic twist as Craig McGlashan speaks to William Blair managing directors Eric Sanschagrin and Andreas Mentzer about their outlook for the region.
Exits remain a key theme this week, as Inflexion has reportedly agreed to sell legal rankings provider Chambers and Partners to Abry Partners. We’ve got some financial details for you on that.
Sports is a sector we’ve seen a variety of deals in, ranging from media rights to club ownership. This morning, we have some numbers on private equity’s interest in the sector in a report by S&P Global.
Let’s start with a region very close to my heart. Craig McGlashan caught up with William Blair’s Eric Sanschagrin, managing director, technology, and Andreas Mentzer, managing director, financial sponsors group about the state of the Nordic technology sector.
There are signs of the Nordic deal pipeline filling for early 2024, said Mentzer, who looks after coverage in the region for William Blair.
“Generally in the Nordics, there was an expectation for a wave of new processes after the summer, which did not really materialise,” he said. “On the other hand, we are seeing a pick-up in pitching activity for assets that are looking to sell off 2024 numbers. That’s part of a broader trend where shareholders are looking to get advisers on board early to be ready for a change in the market environment.”
Fundraising is also active and that build-up of capital “needs to be deployed sooner or later. That gives us confidence when looking into next year”.
Tech has been the “main driver” for the Nordics in 2023, added Mentzer.
“We’ve done seven transactions in the region so far this year and four of those have been technology related,” he said. “We have had a 100 percent conversion rate, which we are really happy about, given the current market conditions.
“Part of the reason is that there are a lot of younger Nordic companies that early on in their lifecycles have to address a European or global market, which makes them suitable for global buyers to pick up. The demand for those companies has always been there and that has helped our momentum.”
I recommend reading Craig’s full story, which covers William Blair’s deals in the region, subsectors enjoying tailwinds and the investment bank’s thoughts on valuations.
Let’s take a look at an exit next. Inflexion has agreed to sell legal rankings provider Chambers and Partners to Abry Partners, according to The Financial Times.
The deal is valued at £440 million (€505 million; $540 million) and generated a return over 4.5x for Inflexion, according to a source familiar with the matter.
Chambers and Partners is a B2B information services provider that ranks individuals and law firms. The company is headquartered in London.
Inflexion led the buyout of Chambers and Partners in March 2018.
The legal sector continues to be of interest to Inflexion. In October, the firm completed the take private of DWF Group, a global law firm and alternative legal services provider, valuing the total equity at £342 million.
Moving onto sports, another topic I enjoy. Private equity is increasingly interested in the sector, according to a report by S&P Global.
Private equity and venture capital backed a total of $2.3 billion-worth of deals, or over 76 percent of the aggregate value across the sector in the year to October 25, the report said.
At the current pace, private equity’s share of the sector’s overall investments in 2023 is on track to mark a six-year high, the report added.
The report quoted Michelle Wilson, founder and co-managing partner of Isos7 Sports Investments, who spoke at the SuperReturn North America conference earlier this month.
“Underpinning that value are the diverse revenue streams that flow to professional sports teams, including broadcast, ticket sales to live events, and a growing sports betting market that is expanding the audience for sports and enhancing engagement with sports leagues,” Wilson said.
Largest deals in the sector include BPEA EQT’s acquisition of IMG Academy, a sports education brand and Chelsea Football Club’s $500 million funding round with Ares Management.