The environment for deals continues to be challenging in 2023, with just $18bn in European M&A deals announced in January, the lowest monthly total since 1993 and an 80% decline from the year prior, according to Refinitiv1. At the same time, however, we are beginning to see growing appetite from private equity firms to capitalize on opportunities ranging from corporate carve-outs to take-privates. Indeed, in its Q4 2022 European Private Capital Outlook PitchBook suggests that European take-private value could reach €30bn in 20232.
We see that both cyclical and secular themes are in play. The rise in energy prices across Europe, combined with a sustained focus on renewables is driving investment in energy sector companies, while the potential applications of AI is giving rise to interest in technology and software companies. Nonetheless, the challenge of raising large financing packages may lead to greater activity in the mid-market, while also fueling an increase in vendor financing hybrid capital or equity bridge structures to fund acquisitions3.
Following a bidding war between a consortium led by Bain Capital and Swedish private equity firm Triton Equity Partners, the board of Helsinki-listed Caverion recommended Bain’s offer of up to €8.50 a share, valuing the building technology and industrial services group at some €1.2bn. The recommended offer gives shareholders the choice between €8 a share in cash on completion, or €8.50 a share nine months from the completion of the tender offer. Under private equity ownership, the company plans to focus on assisting its customers in their transitions to green and smart buildings. In addition, Bain stated that a period of private ownership is necessary to help the company through an extensive transformation process that will enable it to meet its strategic goals4.
The board of directors of Meltwater, a Dutch social media intelligence and analytics company listed on the Oslo stock exchange, voted unanimously to accept a joint bid from Marlin Equity Partners and Altor pitched at NOK18 per share, giving the company a market cap of about €542mn. The terms of the investment allow for shareholders to accept cash or shares in the acquisition vehicle MW Investment BV, or a combination of both. The investment follows a strategic review by Meltwater last year via which it is seeking to become a global leader in digital and social media monitoring and intelligence5, leveraging recent acquisitions in AI that enable PR, communications and marketing professionals to make decisions and influence the world around them6.
UK-based Permira is set to acquire a majority stake in Acuity Knowledge Partners, a leading provider of high-value research, analytics and business intelligence to the financial services sector, from mid-market group Equistone. Acuity’s management team also remains significantly invested in the business, which serves a global client base of over 500 financial services firms, including banks, asset managers, advisory firms, private equity houses and consultants. The investment will enable Acuity, which spun out of Moody’s in 2019, to further extend its position in existing markets, while extending into new adjacencies and geographies7.
Modulaire Group, a Brookfield portfolio company, acquired Mobile Mini UK from Willscot Mobile Mini, a North American leader in modular space and portable storage solutions. With headquarters in Stockton-on-Tees and a network of 16 locations in the UK, Mobile Mini UK is a leading supplier of steel storage containers and portable offices and toilets. It operates a fleet of more than 42,000 units for customers across sectors including construction, retail, manufacturing, healthcare and education8. The deal sees Mobile Mini UK combined with Europe’s and Asia-Pacific’s leading specialist in modular services and infrastructure, while providing Willscot with approximately $410mn in proceeds that it intends to use for reinvestment in its core modular and storage operations10. The deal closed on 31 January 20239.
Hg, the software and services focused private equity firm, secured a €1.88bn trade sale of Transporeon, a German-based transportation management software company, to U.S. software group Trimble. The deal suggests that the company has doubled in value in the three years since Hg purchased Transporeon from fellow buyout house TPG10. Transporeon provides a cloud-based logistics and transport management platform, aiming to solve freight problems by enabling automation, real-time insights and collaboration on €48bn of annual freight. The sale marks Hg’s fourth exit to a strategic buyer in the last 12 months, with the deals contributing to more than $7bn collectively being returned to Hg clients11.