This year is shaping up to be one of the strongest for sponsor-backed buyout financings since the Global Financial Crisis, with a solid pipeline of auctions suggesting yet more leveraged buyout activity should be expected over the summer months.
In the year to May 14, according to LCD, there was €19.1 billion of buyout-backed activity in the European leveraged loan market — the most such issuance by this point of the year since €50 billion was recorded in the same period in 2007. In the European bond market, meanwhile, the year-to-date LBO issuance stands at €8.9 billion, which is the highest for the period since LCD began tracking this volume in 2006 and more than any full year on record apart from 2018 (which hosted €10.2 billion of buyout bond issuance).
More supply is still to come, too, with a number of transactions slated for launch over the summer months and a healthy pipeline of auctions still offering up more secondary buyout options for private equity buyers. A number of large-scale corporate carve-outs also remain on the menu as European firms continue to streamline their businesses, while elsewhere private equity sponsors are making approaches to listed firms for potential take-private acquisitions.
"There's not a scarcity of opportunities right now," said one senior market participant. "No sponsors feel like they're falling behind their investment schedules, and there's more than enough for them to do."
Soaring valuations in the public markets, though, are still impacting private equity players' ability to compete on some situations. Some sponsors are finding more value from listing assets than from selling them — for example, last month Cinven listed clinical laboratory and medical diagnostics group SYNLAB AG on the Frankfurt Stock Exchange in a deal that valued the firm at a market capitalization of €4 billion, after sponsors' bids for the asset fell short of expectations.
France
BofA Securities is said to have been hired to lead a sale of France's SGD Pharma, with a deal expected to raise more than €1 billion. China Jianyin Investment has owned the asset since 2016.
Carlyle is looking to sell bottle manufacturer Saverglass SAS, having bought the asset from Astorg in 2016. The auction will be led by Rothschild, and the sale will be marketed off EBITDA of roughly €130 million, according to sources.
Groupe ECT is expected to be put up for sale by Chequers Capital Partners later in the year, with Rothschild advising. The business, which upcycles excavated soil from construction sites and public works, generates EBITDA of roughly €80 million.
Advent International is reported to have mandated Morgan Stanley and Natixis to lead its sale of telecom services company Groupe Circet SA. A sale could value the firm at almost €3 billion, based on EBTIDA of roughly €350 million, according to reports. The sponsor acquired the firm in 2018. The auction is expected to begin in May.
Prosol SAS, also known as Grand Frais, is being auctioned by sponsor Ardian and founder Denis Dumont. Morgan Stanley and Amala Partners are advising on the process. The French food retailer is to be marketed off EBITDA of €180 million to €190 million, and the sale is expected to have an enterprise value of €2 billion to €3 billion. Xavier Niel is reported to have looked at the asset via special purpose acquisition company 2MX Organic, while Carrefour has also been linked to the process.
J.P. Morgan is leading the sale of pharmaceutical ingredients and specialty chemicals firm Seqens Group Holding by Eurazeo, according to reports. The transaction could value the asset at more than €2 billion.
Germany
Bundesliga International GmbH has short-listed bidders in the sale of a minority stake of its overseas broadcasting rights. Bridgepoint, CVC and KKR are said to still be in the running for the asset, which may be valued at about €2 billion.
Gilde is looking to dispose of computer- and gaming-equipment retailer Caseking GmbH, either through a listing or a sale and has mandated Jefferies and William Blair to lead the dual-track process. The company is being marketed off EBITDA of €65 million-€70 million and expects a valuation of up to 15x EBITDA, according to reports.
Italy
Serie A Football Club Internazionale Milano is reported to have been in separate discussions with Bain and Oaktree about potentially raising new financing of up to €250 million. The club's owner, China's Suning Holdings Group, is reported to be looking to structure the deal as a capital increase or shareholder loan.
Cinven is looking to sell life insurance firm Eurovita SpA, with the business to be valued at up to €600 million, according to reports. Deutsche Bank is leading the process. Eurovita was created through the merger of Ergo Previdenza, Old Mutual Wealth Italy and Eurovita Assicurazioni by Cinven five years ago.
Netherlands
Koninklijke Philips NV has sold its appliances business to Hillhouse Capital after a long-running auction process. The sale valued the firm with an enterprise value of roughly €3.7 billion. The dual-track auction of the business is said to have attracted the interest of private equity buyers including PAI Partners, Apollo, Advent International and CVC, according to sources.
Telecom firm KPN NV has revealed that it turned down two take-private bids from KKR and from a consortium of EQT and Stonepeak Infrastructure Partners. Sources suggest an offer of €3 per share, not including debt, had been mooted, valuing the firm at roughly €18 billion and representing the largest European private equity buyout on record.
Sweden
Polygon International AB, a provider of building restoration services, has been put up for sale by Triton, with Jefferies leading the deal. Triton has owned the firm since 2010.
CVC has sold AR Packaging to Graphic Packaging Holding for about $1.45 billion in cash. The asset had been looked at by other private equity firms, according to sources, but was passed over as some sponsors' environmental, social and governance provisions would not allow them to consider buying a firm that makes tobacco packaging.
Switzerland
SK Capital Partners is in talks to acquire Clariant AG's pigments business after a long auction process. The sale was relaunched at the end of 2020, with Deutsche Bank leading the process and a price of up to CHF900 million (€830 million), or 8x-9x the firm's earnings mooted.
UK
Bridgepoint has acquired U.K. dentistry firm IDH Group Ltd. from Carlyle and Palamon. A sale price that valued the firm at a 10x EBITDA multiple has been reported.
Autovista Holdco UK Limited, the automotive information publisher, may be put up for sale later in the year, according to sources. Hayfin Capital has owned the company (formerly EurotaxGlass) since 2015.
Unilever PLC is still considering a number of options for the disposal of its tea business, which includes brands such as PG Tips, Lipton and Lyons. An IPO, sale or joint venture are all said to be up for discussion for the spinoff of its unit, which may be valued at up to €6 billion to €8 billion, according to reports. The conglomerate is also looking to spin off Elida Beauty, a business focusing on beauty and personal care brands that has a turnover of roughly €600 million.
Fund administration firm Sanne Group PLC has rejected a take-private offer submitted by Cinven. The sponsor offered 830 pence per share (which valued the firm at £1.35 billion) early in May, but it was turned down by the London-listed firm's board.
Partners Group is considering a sale of software firm Civica later in the year, according to sources. The sponsor acquired the firm from OMERS Private Equity at an enterprise value of just over £1 billion back in 2017.
TDR Capital and I Squared Capital are moving ahead with a public-to-private bid for Aggreko PLC after a dissenting vote from shareholder Liontrust Asset Management failed to find support from other shareholders. The 880-pence-per-share bid values the firm at about £2.3 billion. The firm provides temporary power generation and temperature control equipment.
World Rugby Ltd. has hired Jefferies and Rothschild to explore its options for raising new capital. There is the potential for a stake in the commercial rights for the Rugby World Cup to be sold to private equity firms or sovereign wealth funds.
Blackstone has submitted a take-private offer for real estate firm St. Modwen Properties PLC in a transaction that could value the firm at £1.21 billion. The private equity buyer submitted an offer of 542 pence per share, offering a premium of 21% to the stock's previous closing price.
