GPs now mine public markets for gold

Apax Partners and JC Flowers are just two of the heavyweights that are currently investing in publicly-traded companies in the DACH region. Subdued share prices; a glut of seemingly undervalued companies; and a number of distressed or troubled assets make this a good time to 'lay some PIPE'.

JC Flowers has just made a EUR1.127bn investment into listed real estate financing bank Hypo Real Estate. The deal sees JC gain a 24.9% stake in the company with 50 million shares in an all-cash transaction, corresponding to a premium of 25.3% on the average share price over the last three months.

Apax Partners had an e-commerce services group in its PIPEline. The GP intends to acquire D+S Europe AG in three steps, which, when complete, should amount to EUR624m. Initially, Apax is to sign the acquisition of 3.271 million new shares via a capital increase of around EUR42.5m. Then, Apax is to buy additional stakes from investors AvW Group, Tocos Beteiligungsgesellschaft and ASP Holding, which will boost Apax's share to 27%. Finally, Apax plans to make a general offer valued at EUR13 per share in a voluntary public tender offer.

Other GPs are looking to the stock markets for deal flow - in companies they previously backed: Investcorp Technology Partners recently secured a 25% stake in listed data security solutions provider Utimaco Safeware AG for EUR40m. In a similar transaction, Emerald Technology Ventures invested EUR7.1m in listed Schmack Biogas AG.

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