Maitland/AMO Private Equity Monitor – 8 October 2021

8th October 2021

Worth a read

Saudi Arabia to the Northeast

Saudi Arabia’s sovereign wealth fund on Thursday announced a deal to acquire Newcastle United in the English Premier League, after more than two years of talks. The investor group, led by Saudi Arabia’s Public Investment and including British financier Amanda Staveley and the billionaire Reuben brothers, had pulled out of a $380m deal last year heavy scrutiny from the Premier League. The deal has only been allowed to proceed, reports Private Equity News, on the grounds that the club not be controlled by the state, but the deal has drawn criticism based on the poor human rights record in the country.

Public at a premium

According to data from Refinitiv, private equity buyout firms have paid an average premium of 45% for European companies in 2021, the highest since the company started recording such data in 1980. The Financial Times reports that in some cases, the premium has reached 70% and that UK companies were taken private at an average premium of 47%, evidence that the UK has been a target for overseas investors, but perhaps not at the discounted rate previously discussed.

Step up on diversity

According to an article from the WSJ Pro Private Equity, institutional investors who private equity firms are intensifying their scrutiny of manager progress on improving diversity and are asking more questions about how firms are addressing inequities. Despite the issues raised by the murder of George Floyd last year in the USA, which led to protests and promises to tackle racism, the industry is still grappling with how best to do so.

Try to keep calm amid carry reform

A survey carried out by Private Equity International, which asked the views of 90 fund managers and lawyers in the private equity industry, has found that around 80% of respondents thought that proposed changes to the treatment of carried interest in the US would adversely impact the operations of their firms. Nearly 70% of those who took part also thought that the reform could have a detrimental impact on alignment between LPs and GPs.

Wall of money

Main Capital raises a cool €1.2bn

Main Capital Partners has raised €1.2bn across two funds, both of which have closed on their hard-cap. This includes €1bn for Main Capital VII, as well as €210m for Main Capital Foundation I, a new strategy that will focus on earlier-stage companies.

DPI raises $900m

Development Partners International has closed its third Africa-focused fund on $900m, beating the $800m target and also securing an additional $250m of capital to co-invest in companies.

Multiverse raises $130m

Multiverse, an education technology company has raised $130m on a bet that apprenticeships can help level the economic playing field. The funding round valued the company at approximately $875m, more than four times its estimated valuation in January.

Deal chart

Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
LakersVestumSumma EquitySEK 2bn08/10/2021SwedenWaste Services
Newcastle United FCPIF-led consortium-$380m08/10/2021UKSports
MotusThoma Bravo, Permira-Undisclosed08/10/2021USSoftware
VFS GlobalBlackstoneEQT$2.5bn07/10/2021SwitzerlandTravel
MandataTenzingLDCUndisclosed07/10/2021UKTransport and logistics software
Delta FiberEQT, Stonepeak-Undisclosed05/10/2021NetherlandsTelecoms
Wm Morrison SupermarketsCD&R-led consortium-$9.4bn02/10/2021UKRetail

Movers and Shakers

UK & Europe

Rockpool Investments has made a number of promotions across its business, including Darran Green and Guy Ellis to partner and Ben Hutchinson to investment director.

Hanover Investors has appointed Jeremy Westhead to the newly-created role of chief business officer. He joins from technology-focused venture firm, We Are Nova.

North America

The Securities and Exchange Commission (SEC) has named Matthew Harris as co-head of its private funds unit, which performs regulatory examinations of private equity firms, alongside Jennifer Duggins.

From the horse’s mouth...

“We will absolutely see prices go up when competition is that stiff.” – Brenda Rainey, managing director of Bain & Co’s private equity practice on increasing premiums in take-private deals

Valuations have picked up very significantly. Investors have realised the long-term attractiveness of the pet space – combining growth, resilience, digital potential as well as being poised for consolidation” – Jean-Baptiste Wautier, partner at BC Partners 

“Never burn bridges. Today’s junior jerk, tomorrow’s senior partner.”Signourney Weaver, US actor born on this day in 1949