TowerBrook hires advisers to explore Infopro exit

The buyout group has hired advisers at Morgan Stanley and another American investment bank to sell the French information service, two of the sources said. One source named Bank of America as the second bank. Consultants have also been drafted to conduct due diligence work ahead of the sale, one source added.

The sell-side has not decided when to launch a formal sale process, according to the first source, but an auction could kick off by Q4 or early next year, three of the sources agreed.

TowerBrook is aiming to pitch the business to US tech-focused private equity firms, one of the sources said.

Large-cap funds already expressing interest include Cinven, two sources said, while EQT and KKR could also look, one of them added. Thoma Bravo and Genstar Capital would be among logical US-based suitors, an adviser working in the sector said, adding that trade players are unlikely to show interest.

According to one of the sources and the adviser, Infopro generates EBITDA of EUR 125m-150m and revenues of around EUR 450m- EUR 500m, the source added.

EBITDA includes about EUR 25m in capitalised R&D costs, the adviser said, which are often considered a part of the ordinary operating costs at software companies. The group, which has 3,600 employees, offers information, lead generation, workflow, trade shows and other data tools across the automotive, construction, financial services and industrial sectors, among others.

A deal could see Infopro fetch a mid-teens EBITDA multiple, two of the sources said. TowerBrook acquired Infopro in a management buyout from France's Apax Partners and Altamir Amboise in 2016 for an undisclosed sum.

"TowerBrook will make a reasonable return on it either way… they went in lower than 15x EBITDA, so they will arbitrage up on exit," one of the sources said.

Sale discussions come after TowerBrook tested appetite for the business before Covid-19 struck, two advisers said. Long-term funds, including CPPIB, showed interest in the business at the time only to be turned off by the sell-side's price expectations of about EUR 1.8bn, one of them added.

Part of the attraction of buying Infopro is driven by the business's overall performance throughout the Covid-19 crisis, two of the sources said, noting that exposure to events amounts to roughly 15% of the group's revenues. Its longer-term, top-line growth is low, but a lack of big B2B information assets in Europe is also fuelling private equity appetite for it, one source said.

The business has a "competent" management team in place led by president and founder Christophe Czajka, one of the sources added.

Infopro's most desirable divisions are construction and automotive, one of the advisers said, adding that there is an opportunity to make the business more technology-focused by adding more workflow, software and content solutions.

The construction division, comprising titles Le Moniteur, Vecteur Plus and Docugroup, is comparable to Swedish business intelligence provider Byggfakta Group, the first adviser said. Byggfakta, backed by Stirling Square and TA Associates, is said to be exploring an IPO that could value the business at USD 1bn, according to press reports in April.

Meanwhile, Autovista Group, based in London and owned by Hayfin, resembles Infopro's automotive division, comprising Inovaxo in France, ETAI Iberica in Spain and Autronica in Italy, the first adviser said. Autovista's auction process has been quiet since June when Apax, Thoma Bravo and Genstar were reported to be among final bidders.

Infopro may struggle to drive top-line growth given the group's mix of products, some of which operate in cyclical sectors such as packaging and automotive, the first adviser said. Much of the growth has been driven by acquisitions, one of the sources said. Previous deals include Infopro's acquisition of UK-based Haynes Publishing in 2020 for GBP 114.5m, and its bolt-on in 2018 of Docugroup, which provides business information for the construction, architecture and real estate industries, for an undisclosed sum.

TowerBrook, Infopro, Morgan Stanley, Bank of America, Cinven, CPPIB and KKR declined to comment. EQT did not respond to requests for comment.

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