Summer
Deals List

Private equity investment continued strongly with 228 private equity transactions for a total of £46.6 billion in June, according to Mergermarket data. European private equity exit activity has also scaled up, with exit value reaching a total of €126.3 billion in the second quarter. The most attractive sectors for private equity investment remain technology, software & media, pharmaceuticals & healthcare and business-related services & logistics, maintaining a trend that has been unwavering over the last two years. Additionally, sponsors are increasingly pursuing platform acquisition strategies, both to add value to their existing portfolio companies and to deploy capital more efficiently.

The boards of Veolia and Suez have approved the final offer made by a consortium of investors for the ‘New SUEZ’, which will comprise of Suez’s drinking water and utilities business (Suez Eau France SAS), as well as its recycling & recovery business, including R&D and construction activities in France, the water business in Europe and Asia Pacific, and global digital and environmental activities. The deal is expected to complete simultaneously with Veolia’s and Suez's merger in late 2021. Meridiam and GIP are expected to each own a 40% stake in New SUEZ with Caisse and CNP taking a 20% stake. The company will be a major player in environmental services with revenues of nearly €7 billion a year and strong growth prospects and development capabilities both in France and internationally.

[Advisers to Veolia included Messier Maris, Perella Weinberg and law firm Cleary Gottlieb.]

The Carlyle Group has agreed to sell its ownership in Atotech Limited, a US-listed Germany-based holding company, to MKS Instruments Inc. The company provides specialty chemical processes and equipment for the printed circuit board, IC-substrate and semiconductor industries. Atotech will be delisted from the stock exchange and will be re-registered as a private company. Carlyle, which owns a 79% stake in Atotech, has signed an irrevocable agreement to vote in favour of the transaction.

Permira will acquire some 125 million shares in Adevinta, a listed Norwegian operator of online classifieds websites, from eBay. The purchase equates to a 10.2% stake in the company and gives Adevinta an equity value of about €18.6 billion. Following the deal, eBay’s ownership in Adevinta will reduce from 44% to 34%, reducing further to 33% if Permira exercises its option to acquire an additional 10 million shares within 30 days of signing. The sale follows eBay’s recent agreement with Austrian regulators to reduce ownership in Adevinta to secure approval for the $9.2 billion acquisition of eBay Classifieds Group by Adevinta. Permira Partner and Head of Consumer, Dipan Patel, will join Adevinta’s board.

Creat Group, a China-based pharmaceutical company, has been attracting interest from private equity groups and strategic bidders for its Germany- and UK-based blood plasma supply operations, Biotest and Bio Products Laboratory (BPL). Biotest is a German pharmaceutical, biotherapeutic and diagnostic products company, while UK-based BPL is engaged in the production and distribution of blood plasma. Bain Capital and Advent International have teamed up to bid for the assets, while German medical care group Fresenius and Permira have also advanced to the final round. Biopharma group Kedrion has shown interest in BPL although Creat is understood to favour a single buyer for both companies.

The board of supermarket chain Wm Morrison has approved a £9.3 billion offer by a consortium led by Softbank-backed Fortress Investment Group, following its rejection of an earlier bid from Clayton, Dubilier & Rice. Apollo is reported to be in talks to join the consortium after expressing its interest in the business. The transaction is also expected to be the UK’s biggest leveraged buyout since 2007, financed by approximately £6 billion of debt underwritten by HSBC and Royal Bank of Canada, equating to about five times forecast underlying earnings. Amidst much market speculation and government-sought assurances, the consortium has pledged to safeguard pensions and the minimum £10-an-hour wage. With relatively low earnings growth projected by the retailer, Morrisons real estate is expected to be a source of value and returns to the sponsors, either through freehold sales, or the issuance of debt such as property-secured bonds.