Bain Capital’s Nigel Walder says the private equity firm is “wide open for business” in terms of new deals in the second half, joining a chorus of investors telling PE Hub Europe that they are confident about the months ahead.
Dealmaking is certainly picking up, if this morning’s haul is anything to go by.
We’ve got Investindustrial making a play in audio systems, a sector that has been buoyed by the post-covid boom in live events.
Next we have K1 Investment Management playing in another area that has grown rapidly over the last year or so – AI – where it has made a growth investment in a board management software business that uses AI tech.
We then look at Three Hills Capital Partners supporting the MBO of an Iberian audiovisual production services company, before we have Equistone taking a minority investment in a provider of complex loss adjusting and claims products.
We finish with some sad news, that Francisco Partners co-founder Sanford ‘Sandy’ Robertson passed away on Saturday.
‘Wide open’
Bain Capital expects a more conducive environment for dealmaking in the second half of 2024 as the capital-raising and redeployment machine kicks back into gear, Nigel Walder, partner, told PE Hub Europe in the latest of our outlook pieces for the second half of 2024.
Moderating inflation and potential central bank interest rate cuts are improving the financing market, while stability is returning to the fundraising environment and wider economy, said Walder, who as well as leading UK coverage focuses on the consumer and retail sector in Europe for the Boston-headquartered private equity firm. That is making it easier for investment committees to be comfortable leaning into deals, while the lack of exits over the last 18 months means there’s more pressure to monetise assets.
“I’d characterise us as wide open for business in terms of new deals, but at the same time we’re also seeking to selectively get liquidity for some of the businesses where the hard yards of the transformation work are largely done,” said Walder.
So far this year the UK has been active, while business services, tech and financial services saw good levels of activity. Industrials and healthcare have been a bit quieter – while Walder called activity levels in the consumer sector “moribund”.
“We’re still in the throes of many consumer businesses dealing with the impacts of the cost of living, inflationary pressure and some legacy supply chain disruption. All that has meant that buyers have been more cautious about consumer assets and sellers launch processes only if they’re certain that they’re going to get a good reception.”
Check out the full interview to gain more of Walder’s insights on the consumer sector.
Editor’s note: PE Hub Europe will be running second half 2024 outlook pieces with senior private equity dealmakers through August. The previous instalment was with Tim Creed, co-portfolio manager and head of private equity investments at Schroders Capital.
Amped up
One consumer sub-sector that was among the biggest sufferers during the pandemic has come roaring back – live music. One only has to look at pop superstar Taylor Swift’s Eras concert tour, the first ever to gross over $1 billion, as evidence of that.
Private equity has jumped on the trend, including PAI Partners earlier this year agreeing to buy audio mixing and engineering business Audiotonix, which includes Swift among its customers, from Ardian in a deal value at just under £2 billion ($2.6 billion; €2.3 billion). Ardian opted to stay invested in the business thanks to its confidence in the sector, Edward Little, director within Ardian’s buyout team, told PE Hub Europe at the time.
Now Investindustrial is tapping into the market, this morning agreeing to acquire RCF Group, an Italian designer, manufacturer and distributor of professional audio products and systems.
RCF produces professional loudspeakers for large-scale concerts and installations, such as stadiums and arenas, portable loudspeakers for small events and medium-sized installations, and loudspeakers for recreational, commercial and public facilities.
In 2023, RCF reached a turnover of approximately €250 million, with the majority of revenue generated outside of Italy, according to a press statement.
AI play
While live entertainment has been booming, it probably hasn’t got quite as much attention as the AI sector over the last year or so. Although some voices are beginning to question just how transformative the technology will be – hedge fund Elliott Management said last week that AI was “overhyped”, according to a letter to clients seen by the Financial Times – there is still plenty of interest in the sector.
This morning, K1 Investment Management announced a growth investment in board management software business Board Intelligence, which describes itself as ‘AI-powered’.
London-based Board Intelligence provides software and services that aim to drive better board decision making. It also offers Lucia, an AI-powered report-writing platform, which aims to help management teams to prepare shorter reports for their board. Board Intelligence’s clients include Generali, National Grid and Zurich Insurance Group.
The investment will allow Board Intelligence to strengthen its “category-leading” position through organic growth, product and geographic expansion and strategic acquisitions, according to a press statement.
Blue-chip
Switching back to the world of audiovisual, Three Hills Capital Partners has supported the MBO of TwentyFour Seven (24.7), an Iberian audiovisual production services company that works on advertising campaigns for global blue-chip brands.
The founders and senior management team, including Ivo Van Vollenhoven, Álvaro Weber and Gordon Mackinnon, regain control of the company following a five-year investment from Spanish private equity firm Nexxus Iberia Private Equity.
24.7’s clients include global names like LVMH, Nike and Adidas. The majority of its customers are based in the US and UK.
Professional services
Equistone Partners Europe has announced a minority investment in QuestGates, the UK’s largest independent provider of complex loss adjusting and claims products.
QuestGates generated revenues of £41 million in the 2023-24 financial year and employs 500 people. Headquartered in Birmingham, it has 12 offices across the UK and Ireland.
Equistone’s investment will aim to support the existing growth strategy, including diversifying into wider specialist claims services and adding to the 18 M&A deals QuestGates has made since its founding in 2003.
Passing
Some sad news to end with. Francisco Partners has shared that co-founder Sanford ‘Sandy’ Robertson passed away on Saturday. He was 93 years old.
Here is a statement from Dipanjan ‘DJ’ Deb, co-founder and CEO of Francisco Partners:
“Sandy lived a long and loving life, and the impact he has had on Silicon Valley and the growth of the technology industry in the world is impossible to quantify. The words ‘legend’ and ‘icon’ are often over-utilised today, but Sandy was both. He started two of the four investment banks known as the ‘Four Horsemen’ that dominated technology banking for three decades, from the dawn of venture capital as an industry in the ‘70s through the dotcom boom of the ‘90s. He then co-founded one of the leading technology private equity firms in the world, Francisco Partners. Sandy was deeply involved with his alma mater, the University of Michigan, where he received both his undergraduate and MBA degrees and co-founded the endowment’s Investment Advisory Board. His active not-for-profit work also included decades of support for UCSF.
“Sandy was far more than the industries he contributed to building and the illustrious company he kept. What stands out to me is not what he accomplished; rather, it was how he made people feel. He treated everyone equally, and with respect and appreciation. We will miss him dearly as will his family. He was a mentor and father figure to so many of us and while others may be compared to Sandy, he will never be compared with anyone else.”
He is survived by his wife Nancy, three daughters, six grandchildren and two great-grandchildren.
We offer our condolences.