Europe has faced many of the same recent challenges as the rest of the globe: inflation, spiking energy costs and rising interest rates. However, private equity investment in Europe has outperformed other regions. Megadeals, including public-to-privates and recapitalizations, helped fuel activity within the private equity segment, while large funding rounds for maturing start-ups sustained VC activity. Infrastructure, healthcare and technology/software were again key areas of focus as sponsors targeted companies in sectors considered to have resilience to trade through potentially challenging periods ahead.
The French refurbisher and reseller of tech equipment, mostly smartphones, achieved a valuation of €5.7bn in its Series E funding round, making it France’s most valuable tech start-up at the time. The deal highlighted the ongoing and resilient appetite for venture capital investment in Europe in the first half of 2022, as well as growing focus on businesses with a strong sustainability angle. The company aims to increase consumer confidence in buying second-hand phones, thanks to its low failure and return rate, which it also sees as a way of reinforcing a more sustainable “circular economy”.
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. Despite resistance from some Accell shareholders, the deal highlighted the continued interest in take-private opportunities across Europe. The proposed investment came with working capital to help finance inventory and smooth the pressures of supply chain bottlenecks for parts, with CEO Ton Anbeek welcoming the long-term view of private equity, which he differentiated from the short-term approach taken by public markets.
Blackstone led a group of investors in a €21bn recapitalization 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 deal was also the largest private equity-backed transaction in Europe in the first half of the year. The bulk of the funds for the recapitalization were provided by existing investors, in a show of their strong belief in Mileway’s future growth prospects.
Macquarie Asset Management and British Columbia Investment Management Corporation formed a consortium to acquire a 60% stake in National Grid’s gas transmission and metering business, demonstrating sponsors’ appetite for large infrastructure deals across the continent. As part of the transaction, the consortium entered into an option agreement for the potential acquisition of the remaining 40% stake in the business on broadly similar terms.
French private equity group Astorg beat a field of rivals including Advent International to take over the German manufacturer of active pharmaceutical ingredients. The deal highlighted the trend for corporate carve-outs in Europe, as well as private equity’s strong focus on healthcare businesses, including those that benefit from increased vaccine development following COVID-19. The sale follows a strategic review in which seller ICIG concluded that it would focus efforts on its chemicals portfolio.