Palatine reaps 6x money on SBO of Anthesis to Carlyle

Ero Partsakoulaki
03 July 2023

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UK-headquartered private equity firm Palatine has exited UK-based sustainability advisory firm Anthesis in a secondary buyout to US-headquartered sponsor Carlyle, which has taken a majority stake.

The GP reaped 6x return on its initial investment and will be reinvesting in the company acquiring a minority stake alongside Anthesis' management team, according to a press release.

The deal values Anthesis at around GBP 400m, according to Bloomberg.

Palatine first acquired a minority stake in the company via its debut impact fund and its fourth buyout vehicle in 2021. Palatine Private Equity Fund IV held its final close on GBP 220m in May 2021 and deploys equity tickets of GBP 10m-GBP 30m, according to Unquote Data. The fund is currently about 70% deployed, Palatine Private Equity Managing Partner Gary Tipper told Unquote.

The firm's debut impact fund held a final close in 2017 on GBP 100m, surpassing its GBP 75m target, according to Unquote Data, and is now fully deployed, he said.

The firm reinvested in the business by deploying capital from Palatine Private Equity Impact Investing Fund II, which held a first close on GBP 125m in April 2022. It also reinvested its proceeds from Fund IV, he added. The impact strategy sees the GP invest GBP 10m-GBP 25m in businesses with a focus on delivering positive social impact.

During the sponsor's investment period, Anthesis' revenues grew significantly, while its team more than doubled to 1,250 staff members, according to the press release. The company also completed five strategic acquisitions: Ontario-based Provision Coalition, plus a merger with Netherlands-headquartered Climate Neutral Group, in January 2022; ESG advisory firm Wallbrook; Swiss-based marketing agency Chalescannon; and Padd Energy, a UK-based consultancy supporting the transition to low carbon.

Carlyle will seek to further strengthen the company's ESG and sustainability approach following its investment, it said. Looking ahead, the sponsors will continue to scale the business both organically and via M&A targeting companies across the world, while focusing on digitization, said Tipper.

The GP's Europe strategy typically invests in companies with enterprise values of more than EUR 200m. Its fifth Europe-focused fund held a final close in December 2019 on EUR 6.4bn and the GP registered its successor vehicle in January 2023. According to Unquote Data, the fund has a EUR 7.5bn target.

Company
Founded in 2013, Anthesis is a UK-headquartered global sustainability firm that develops financially driven sustainability strategies. It has clients across all industry sectors, including Reckitt, Cisco, Tesco, The North Face and Target. The company employs more than 1,250 staff members and operates across 45 countries. It has offices in Andorra, Belgium, Brazil, Canada, China, Colombia, Finland, France, Germany, Hong Kong, Ireland, Italy, the Middle East, the Netherlands, the Philippines, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, the UK and the US.

People
Palatine Private Equity − Gary Tipper (managing partner), Beth Houghton (impact managing partner).
Anthesis − Stuart McLachlan (CEO).

Advisers
Palatine − Lazard (corporate finance); Evershed-Sutherland (legal); Deloitte (financial), Boston Consulting Group (commercial due diligence); Swan Partners (financial); RSM (tax).

[Editor's note: The article has been updated post publication to add comments from Palatine Private Equity Managing Partner Gary Tipper. The third paragraph has been amended to clarify the deal values Anthesis at around GBP 400m.]