Morning all, Craig McGlashan here on Europe Wire duty from the London newsroom.
Private equity firms are finding plenty of opportunities to invest in businesses critical to fast-growing sectors like electric vehicles. We take a deep dive into one such deal this morning, as Astorg’s Paul Arhanchiague and Nicolas Marien walk us through their plans for Lebronze Alloys, a manufacturer of specialty copper and nickel alloys.
Next we take a look at what’s happening with the valuation gap between buyers and sellers, via a report on the UK private equity M&A outlook by Deutsche Numis and comment from the investment bank’s Alec Pratt.
We then have news that Apax Partners has dropped plans to form a continuation fund for some of its portfolio companies.
Finishing with a deal that is going ahead, Main Capital Partners is merging two of its portfolio companies in the document software sector.
‘Critical’ components
Astorg’s growth plans for Lebronze Alloys (LBA) will focus on increasing its applications and product offerings, as long-term demand for copper alloys rises, Paul Arhanchiague, managing director at Astorg and Nicolas Marien, partner, told PE Hub’s Irien Joseph.
Find out more in the premium version of the Wire.
Astorg VIII, the GP’s large-cap fund, is making the investment.
Astorg is also making a push in the mid-market. To find out more, read our Dealmakers to Watch profile of the strategy’s co-founders, Lionel de Posson and Edouard Pillot, from earlier this week.
Mind the gap
What’s going on with the valuation gap? There are signs that the gap is narrowing. I was in Deutsche Numis’s London office yesterday for the launch of the investment bank’s ‘UK Private Equity M&A Outlook 2024’ report, which found that the valuation gap is less of a concern than a year ago.
I asked Alec Pratt, co-head of EMEA financial sponsor M&A at Deutsche Numis and one of the report’s authors, whether that suggested the valuation gap was also closing for assets other than top-tier holdings.
Read his reply and more from the report in the premium version of the Wire.
Discontinuation
One of the ways that GPs have been dealing with the sluggish exit market has been via continuation funds, but it looks like they might be waning in popularity as other options reopen.
Perhaps illustrative of that shift is Apax Partners opting not to form a continuation fund for some of its portfolio companies, affiliate title Secondaries Investor has learned.
Read more in the premium version of the Wire.
Document merge
We’ll finish with a deal that is going ahead and just went live on PE Hub at press time.
Main Capital Partners is merging two of its portfolio companies.
OK, that’s all from me today. Rafael Canton will bring you the US Wire later today, while Nina Lindholm will be on Europe duty tomorrow as I’m in training.
Happy dealmaking…
Craig
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