Scout24 eyed by buyout groups including H&F, EQT, Permira

Amy-Jo Crowley , Ryan Gould , Charlie Taylor-Kroll and William Cain
08 April 2022

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Buyout groups Hellman & Friedman (H&F), EQT and Permira have discussed the prospect of exploring a bid to take Scout24 private, two sources familiar with the matter said.

The Germany-based real estate marketplace has also attracted the attention of Cinven Partners and CVC Capital Partners, according to one of the sources.

While the sources said interest in Scout24 is still considered preliminary, news of private equity firms studying the viability of a deal follows a nine-month period that has seen shares in the Munich-headquartered group fall more than 25%. Since hitting an all-time high of EUR 77.75 per share in August 2020, Scout24 shares have slipped roughly 32% for an equity value of EUR 4.23bn.

The sustained downward trend in Scout24's share price has put the company back on the M&A radar for cash-rich financial sponsors, the sources and a third source familiar with the matter said.

The company also has history with private equity: H&F and Blackstone failed in a EUR 43.50 per share offer – worth EUR 5.7bn – to take Scout24 private in 2019. H&F went on to acquire the group's automotive marketplace AutoScout24 later the same year for EUR 2.9bn, or 29.8x EBITDA.

The likelihood of H&F pursuing Scout24 for a second time will largely depend on whether it can form a consortium with another buyout group such as EQT, one of the sources said. "It is a matter of who steps first," he added.

Still, a deal for Scout24 could prove expensive, a fourth source familiar with the matter said. The company is trading at 18x FY22(E) EBITDA, which, including a premium, could demand a takeout multiple of up to 23x core earnings, he said. Buyout group Silver Lake delisted key UK-based peer Zoopla at 23x core earnings, or GBP 2.2bn (EUR 2.6bn), in 2018.

According to Dealreporter analytics, a bid at EUR 65 per share would value Scout24 at roughly 22x FY22(E) EBITDA, equivalent to a 22% premium. An offer at EUR 70 per share would value it at 24x, equivalent to a 30% premium. Including a premium, a deal could value Scout24 in excess of EUR 5bn, two of the sources said.

Any suitor will need to make clear the strategic value of making a bid for Scout24, which would likely centre on extracting more growth through consolidation from the German real estate market, one of the sources said.

Take-privates are quickly becoming a focal point in conversations with investors across Europe. This news service reported earlier this year that German remote control access provider TeamViewer had also attracted interest of financial suitors, while a newswire report last week said Polish operator of e-commerce lockers InPost has also drawn takeover interest.

Representatives for Scout24, Hellman & Friedman, EQT, Permira, Cinven and CVC declined to comment.