10 Standout Private
Equity Deals of 2021

Private equity activity started 2021 strongly as countries began vaccination drives against COVID-19 and markets continued their recovery from the lows of early 2020. Data from Pitchbook showed that in 2021 first quarter deals involving private equity in Europe hit €159bn, up 28.5% on 2020, while the number of transactions increased by 80% to almost 2,0001. International private equity firms began circling UK listed companies, drawn by relatively low stock market valuations and weakness in sterling following Brexit.

First Quarter

A consortium of investors, which included Bill Gates’ wealth manager Cascade Investment, agreed to buy Signature Aviation – a leading provider of aircraft services and ground handling for private jets – at a valuation of over £4.4bn. The company attracted significant private equity interest as private aviation withstood the impact of COVID-19 better than commercial travel, with sponsors launching competing offers before teaming up for a recommended bid.

Another take-private focusing on perceived weakness in UK public market valuations. Aggreko, a world-leading provider of mobile modular power, temperature control, and energy services, was severely hit by the pandemic. However, sponsors saw an opportunity to reposition the business to benefit from the transition to clean energy and net zero objectives.

Second Quarter

Investment accelerated in the second quarter of 2021 as spring arrived, COVID infections dipped and vaccinations allowed reopening measures to gather pace. With renewed confidence in the direction of the recovery, private equity firms embraced a growing range of business sectors, while venture capital investment volumes grew rapidly as investors sought opportunities in European tech start-ups. Data from Invest Europe showed that, amid a record first half for private equity deals in 2021, VC investment soared by 85% to a new high of €10.2bn2, while growth capital invested in European scale-ups increased almost three-fold to €17.5bn.

Glovo, the Spanish delivery app, raised £383.08mn in its series F funding round led by New York-based investment managers Luxor Capital Group and Lugard Road Capital. Glovo was seeking funds to expand its Q-Commerce unit, which is responsible for its quick-delivery services and grocery operations, as well as “dark stores” – small warehouses Glovo uses to fulfil orders from retailers. The deal exemplified the rapid growth in the superfast delivery sector and logistics management, following large fundraisings by Getir, Rohlik and Gorillas in the same sector.

Northvolt AB, a Sweden-based battery developer and manufacturer, raised almost £2bn to ramp up electric vehicle battery production in Europe, making it one of Europe’s largest start-ups with a valuation of almost £8.5bn. The company has been tapping into fast-growing demand among auto manufacturers for the transition to EVs. At the time of the investment, it had secured over £19bn worth of contracts from key customers, including BMW and Volkswagen.

SUEZ business divisions, including its drinking water and utilities business (SUEZ Eau France SAS), the recycling & recovery business, and the water business in Europe and Asia Pacific, attracted a number of offers from rival consortia. In the end, Meridiam, GIP and CDC Group struck a deal at a valuation in excess of €10bn to carve out the assets into a new company. The deal is scheduled to complete simultaneously with Veolia’s and SUEZ's merger, now expected in January 2022. The investment underscored appetite for deals in the infrastructure space that can derive both long-term yield, as well as the potential for growth in emerging and developed markets.

Third Quarter

The summer months brought little pause for breath in Europe following the record first half of 2021. The period was marked by some of the largest investments of 2021, as competition for high quality assets overturned expectations that deal sizes might start to decline.

U.S. private equity firm Advent International and Singapore’s sovereign fund GIC teamed up to buy biotech company Swedish Orphan Biovitrum. The pair’s offer received backing from the company’s largest shareholder – the holding company for Sweden’s Wallenberg family – which paved the way for one of the biggest European healthcare buyouts in recent years. The deal highlighted growing appetite from sovereign investment funds to co-sponsor deals, as well as private equity’s ever-expanding interest in the pharmaceutical sector.

Listed French media group Vivendi SA agreed to acquire a near-18% stake in Lagardere SCA, a French publishing and travel retail company, from Amber Capital. The deal should trigger a mandatory offer for the remaining 54.9% stake in Lagardere, which would create one of Europe’s biggest media companies, spanning television, gaming and publishing. The deal values the whole of Lagardere at €6.22bn and underscores the ongoing corporate consolidation trend benefitting private equity sellers.

Fourth Quarter

Following three quarters in 2021 that delivered a record 5,500 deals worth nearly €550bn, beating the previous record of €493bn set in 2018, according to Pitchbook data, investment showed few signs of slowing in the final quarter of last year. Indeed, the fourth quarter of 2021 holds some of the largest buyouts of the year, despite fresh predictions that deal sizes would finally decline, even if deal volumes did not. 2021 will stand as a new record for private equity investment in Europe and globally, with many drivers for large-scale investment remaining intact in 2022.

Following a four-month process, in which the UK’s Takeover Panel stepped in to organise a formal auction, UK grocer Morrisons was sold to U.S. private equity firm Clayton, Dubilier & Rice at a valuation of £9.97bn. The deal represents a 61% premium to the Morrison’s share price before the process began. Among the attractions for private equity were the company’s large real estate portfolio of owned stores and manufacturing sites. The deal also exemplified the trend in 2021 for strongly contested competing bids for publicly listed companies.

European consumer goods group Unilever announced the deal to sell ekaterra, the world’s largest tea producer, on a cash-only, debt-free basis following an auction process featuring mainly private equity and sovereign investors. The sale is part of a refocusing at the company as it looks to exit slower-growing brands and enter other fast-growing segments. The deal also highlights the continuing flow of company carve-outs in Europe, as well as the rise of investor activism on the continent as hedge funds push for disposals and break-ups at large, established companies in order to extract value.

U.S. private equity firm KKR launched a friendly bid for Italy’s biggest telecoms group Telecom Italia, which, if it succeeds, will be the largest ever buyout in Europe and the largest private equity deal globally last year. KKR offered a 46% premium to the company’s share price, valuing company equity at €10.8bn. The offer follows KKR’s successful consortium bid for Spain’s Mas Movil late last year and reflects the relatively low valuations being ascribed to telecoms groups by public markets investors.

Michael J. Preston
Partner

London
T: +44 20 7614 2255
mpreston@cgsh.com
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Gabriele Antonazzo
Partner

London
T: +44 20 7614 2353
gantonazzo@cgsh.com
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Michael James
Partner

London
T: +44 20 7614 2219
mjames@cgsh.com
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