Morning all, Craig McGlashan here with the Tuesday Europe Wire from the London newsroom.
We’re taking a deep dive into the winner of PE Hub’s Large-Cap Deal of the Year this morning – congratulations to Permira. We announced all the winners yesterday – all the details on the deals that won can be found here.
Next, we look at a couple of overnight announcements from the US and what they could mean for private equity dealmaking.
Wrapping up, Verdane has provided an update on its potential take-private of UK-based internet services multinational Team Internet.
Underpinning
Permira had to convince the founders of Alter Domus, a fund administration and corporate service provider for the alternatives sector, that a larger investment made more sense than the 20 percent stake they were looking to sell in 2016. Seven years later, with an enterprise value grown to €4.9 billion from €521 million, Permira was this time more than happy to take a minority share in an exit to Cinven – bagging PE Hub’s Large-Cap Europe Deal of the Year in the process.
The original investment came during “the early days when fund administration was not well known,” Philip Muelder, partner, co-head of services at Permira, told PE Hub. “We saw the strong growth underpinning the market, the growth in alternative assets and the highly recurring, annuity-type revenues that this was creating.”
Alter Domus stood out thanks to its leadership position in its home country of Luxembourg and its three founders, who sought growth in North America. Permira saw the chance to apply its value-creation levers, including M&A and tech-enablement.
Aside from having to convince the founders that a larger investment was more appropriate for securing a strategic partner, the acquisition was “a hotly contested but complex process because the cultural fit with the founders, and being assessed as a value-add but sensitive partner, was really important,” said Muelder. “We took the founders on a trip to North America to show them Permira’s capabilities on the ground. It was really that global capability and our engaged partnership approach that helped us secure the strategic investment into Alter Domus.”
Upgrade to the premium version of the Wire to find out how Alter Domus grew in the US, its organic tailwinds, the entry and exit multiples and how Alter Domus has grown further since the partial exit.
PE Hub received hundreds of nominations for the 2024 awards. Our criteria for selecting the winners included a wide array of metrics, such as multiples on invested capital; internal rates of return; EBITDA growth; employee retention, expansion and participation in exit proceeds; add-on deals and organic growth. We also looked at investment rationale and plans, as well as methods of growth and how exits were made. And we considered the significance of transactions within a sector and how they exemplified the year’s challenges and opportunities.
For more on the nomination and selection process, click here.
Check the Wire throughout the week for more coverage of all the winners.
Policy shifts
There was some big news out of the US overnight. The country is pausing military aid to Ukraine and moving ahead with tariffs on Canada, Mexico and China.
Read our analysis on what the developments could mean for dealmaking in the premium version of the Wire.
Called off
One deal that’s not going ahead is Verdane’s take-private of Team Internet, a UK-based internet services multinational.
Read more in the premium version of the Wire.
That’s all from me today. Michael Schoeck is on US Wire duty later today and I’ll be back with you from London tomorrow.
Cheers,
Craig
Read the full Wire commentary on PE Hub ...
