Five Ground-Breaking
Q1 European Private
Equity Deals

Compared to 2021, which was a record year for private equity, the pace of deal activity in Q1 of 2022 has slowed. The pullback in activity has largely been due to challenging macroeconomic factors and a highly contentious geopolitical situation. The Bank of England has now raised its key interest rate three times to 0.75% in an attempt to combat inflation. Higher oil prices, energy costs and supply chain disruption have also put pressure on businesses, causing a negative knock-on effect on balance sheets and portfolios. Meanwhile, the unfolding events in Ukraine have led to an escalating humanitarian crisis, as well as global action and economic disruption. Despite this tumultuous start to 2022, there have been some record-breaking and note-worthy deals in the private equity space.

Blackstone is leading a group of investors in a €21bn recapitalisation of Mileway, the Netherlands-based owner and operator of last-mile logistic assets, which the firm has described as the largest ever private equity real estate transaction, according to Dealogic data. The recapitalisation is subject to a “go-shop” process. As part of the recapitalisation, existing Mileway investors have been offered the opportunity to retain or increase their shareholdings or exit for cash. The bulk of the funds for the recapitalisation are being provided by existing investors, in a show of their strong belief in Mileway’s future growth prospects.

Societe Generale’s ALD subsidiary agreed to buy European car leasing group LeasePlan in a cash and shares deal to create one of the world’s largest vehicle leasing groups, with 3.5mn vehicles. The French bank has said it views the investment as creating a third pillar for the business alongside its traditional retail and investment banking operations. Car leasing is seen as more profitable than most banking operations, with SocGen’s ALD having generated historical returns on equity in the mid-teens. Private equity firm TDR Capital and its consortium members will reinvest to hold approximately 31% of the new leasing business. The transaction is expected to close by the end of 2022.

Singapore investment fund Temasek is acquiring a majority stake in Element Materials Technology Group, a UK-based provider of materials testing, product testing, failure analysis and consultancy services from Bridgepoint. The transaction is reportedly valued at $7bn and is Temasek’s single biggest investment since it acquired a stake of roughly 25% in health and beauty retailer AS Watson in 2014. The deal underlines growing appetite for direct private equity deals among large sovereign investors, while providing an exit for Bridgepoint.

A consortium led by Macquarie Asset Management, and including British Columbia Investment Management Corporation and MEAG, have agreed to acquire Reden Solar at an enterprise value of €2.5bn. Reden Solar, founded in 2008, builds and operates solar power plants in Europe and Latin America. France and Spain are the company’s core markets although it has recently expanded into Greece in Italy. The transaction is expected to close by Q3 2022 and will provide an exit to the two French investment firms.

KKR put forward an offer for the Dutch listed owner of the Raleigh bicycles brand that was priced some 42% above the company’s recent average share price and 21% above its highest-ever price¹. The proposed investment comes with working capital to help finance inventories and smooth the pressures of supply chain bottlenecks for parts. An approved deal would see Ton Anbeek stay in place as CEO of the private company. In an interview promoting the investment, Anbeek welcomed the long-term view of private equity, which he differentiated from the short-term approach taken by public markets². The offer highlighted the value private equity sponsors continue to see in public markets, not only in the UK, but across Europe.