Five Top Deals
of the Month

The effects of the continuing conflict in Ukraine as well as rising oil prices, inflation rates and interest rates have continued to take their toll on businesses and by extension, private markets deals. A survey of the top 25 growth investors undertaken by Numis at the end of 2021 showed that 70% expected valuations to hold steady or rise in 2022. Now, just a few months after that survey was taken, 90% of investors anticipate offering lower valuations in the coming 12 months¹. This turnaround is reflected in declines for listed technology stocks, with investors particularly concerned about the sensitivity of high-growth technology companies to rising interest rates and policy tightening by governments and central banks, which could stifle growth and profitability. Despite dampened sentiment, noteworthy and headline-grabbing deals still continue across a wide range of industries, underlining appetite among private equity firms and their investors.

Blackstone and the Italian family that own the fashion brand Benetton announced their takeover bid for the Italian infrastructure group, Atlantia, at a price of €23 per share. This bid values Atlantia at 11.5 times its projected earnings for next year. This transaction would be the year’s second largest M&A transaction globally, as well as Europe’s largest private equity-backed deal on record, according to Refinitiv data. Edizione, the holding company which manages the Benetton family’s fortune, already owns a third of Atlantia. Following the proposed deal, Edizione would own 65% of Atlantia while Blackstone would hold the remaining 35%.

Macquarie Asset Management and British Columbia Investment Management Corporation have formed a consortium to acquire a 60% stake in National Grid’s gas transmission and metering business. National Grid is a UK-based electricity and gas network developer and operator. The transaction is expected to complete in the second half of 2022, subject to antitrust and regulatory conditions. As part of the transaction, the consortium have entered into an option agreement for the potential acquisition of the remaining 40% stake in the business on broadly similar terms, subject to any necessary adjustments.

CVC Capital Partners Limited has made a non-binding offer to acquire a 49% stake in the enterprise division of TIM, the Italy-based telecommunications company. The unit, which is still being set up, will form part of TIM’s ServCo division and will include the Olivetti brand and cloud computing activities. The deal was unveiled before TIM announced that it would not be granting KKR access to its books to conduct due diligence, effectively ending the U.S. firm’s €33bn pursuit of the entire telecoms group.

Private equity firms Advent International and Centerbridge Partners, along with co-investors, put forward a bid to acquire Aareal Bank, the listed Germany-based provider of finance, advisory and other services to the commercial property and institutional housing sectors. This is the second bid that the pair have made for the bank; their first bid made earlier this year was unsuccessful as it failed to secure the support of at least 60% of Aareal Bank’s shareholders. The initial bid offered €29 for each Aareal Bank share whilst this latest bid is for €33 per share.

Advent International has agreed to acquire IRCA, an Italian producer of specialty ingredients for artisanal pastries, cakes and gelatos from The Carlyle Group, which originally invested in the business in 2017. As part of its growth strategy, Carlyle oversaw the group’s expansion in the U.S., as well as its acquisition of Dobla, a maker of premium chocolate decorations. Advent intends to continue to work with the current management team to scale the business in Italy and abroad, and to expand its already broad portfolio of products.