The Deals Pipeline

Unquote team
10 March 2021

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A highlight of deal processes underway and involving private equity, either on the buy- or sell-side, across Europe

UK

Xceptor, a UK-based data automation software provider backed by CBPE, attracted several PE funds ahead of the first-round bid deadline on 8 March, Mergermarket reported on 4 March. Private equity firms that are expected to submit bids include Corsair, Hg, Nordic Capital and Vitruvian. Montagu is also thought be looking at the asset, while Astorg is among those showing interest. While there is some interest from two undisclosed trade bidders, Xceptor is likely to opt for a private equity buyer. Xceptor should fetch around 10x revenues, with group revenues of £27m for the year ending on 31 July 2020. There was a failed pre-emptive attempt by US-based Francisco Partners last year, according to Mergermarket.

Carlyle and Cinven are among the private equity bidders competing in the final phase of End Clothing's sale process, Mergermarket reported on 2 March. The auction of the UK online apparel company is heading towards a final deadline within the coming weeks. The Goldman Sachs-led sale was paused briefly in January due to business interruptions that occurred in December. General Atlantic has also held acquisition talks with the company. End Clothing, which has Index Ventures among its minority shareholders, is still contemplating a possible listing of the business instead of a sale. The sell side is benchmarking the business against other online clothing retailers to justify a price tag of around £700m.

Financial advisory firms are in the early stages of positioning themselves for a Bridgepoint exit of consulting group HKA, Mergermarket reported on 26 February. The sponsor will launch a dividend recapitalisation of the company in the coming months, following which a sale is expected in 2022. Bridgepoint spoke with banks about its options before Christmas, but has not appointed an adviser. It has yet to decide when it will invite banks to bid on the mandate. HKA, which specialises in dispute advisory services for the construction industry, is targeting $50m EBITDA for 2021.

France

Saverglass, the France-based manufacturer of glass bottles backed by Carlyle, is said to be planning a sale with Rothschild advising, S&P Global Market Intelligence reported on 6 March. The deal valuation will be based on its €130m EBITDA.

Bruneau, a French online office supplies retailer, has been put up for sale by owner Equistone, Mergermarket reported on 3 March. Rothschild and Macquarie Capital have been mandated as sell-side advisers. The sale process is in an early stage and is expected to close by the end of the year. Bruneau generates around €65m in EBITDA. While strategic buyers are unlikely, Bruneau is expected to spark interest among financial sponsors.

Benelux

BC Partners is exploring a sale of its Amsterdam-based holding Pharmathen, which could potentially fetch €1.5bn, Bloomberg reported on 2 March. The PE firm is interviewing advisers regarding a sale of the generic drug manufacturer. BC Partners is a minority shareholder in Acuris, the publisher of Unquote.

KKR and Apax are through to the second round of the sale of Advent's international ERP software business Unit4, Mergermarket reported on 9 March. Hellman & Friedman has also been admitted to the round, with a couple of other unknown sponsors thought to have made the cut. The deadline for the second phase of the process is in four to five weeks, though the sell-side could wrap the deal up sooner given appetite for the asset, according to the report. Bain Capital's offer of roughly €1.5bn was considered too low, and CVC, which showed initial interest, is also out of the process, sources said.

DACH

Crown Holdings is moving ahead with the process to divest its European food cans division, with revised offers due on 8 March, Mergermarket reported on 6 March. Sonoco has joined a pool of bidders comprised predominantly of financial sponsors. KPS Capital Partners, Lone Star Funds, Onex and Platinum Equity (bidding via portfolio company Ball Metalpack) are the other participants in the process. Crown is expected to narrow down the list of bidders further following the revised offer round, aiming to collect final bids and sign a deal by the end of March. Crown's European food cans unit is being marketed based on pro forma EBITDA of around $250m. The private equity suitors now chasing the asset are generally considered to be more "value-conscious", marking a change from the beginning of the auction, which saw interest from sponsors typically associated with buying quality assets at fuller prices. This shift means the business could be valued at a multiple of 8-9x EBITDA, as opposed to the 9x multiple previously touted.