Financial services is the opening theme of the day, an area where increasing regulatory requirements and the digital transformation are requiring consultancy work – meaning private equity is seeing value in acquiring such businesses. Bridgepoint is the latest firm making a play in the sector.
Switching to energy, we look at Carlyle Group agreeing to acquire a portfolio of gas-weighted exploration and production assets in Italy, Egypt and Croatia.
Finally, we look at a mixed week for IPOs of PE-backed companies, where one listing has kicked off and another has been postponed, with the lister blaming market volatility sparked by European elections.
Take-private
Financial services consultants are drawing private equity interest thanks to factors such as growing regulatory burdens and the digital transformation – with Bridgepoint the latest to make a move in the sector.
The private equity firm has agreed a £626 million ($796 million; €742 million) cash offer to acquire Alpha Financial Markets Consulting, a consultancy service provider to the financial services industry based and listed in London.
The 505p per share offer gives a premium of 50.7 percent over the closing price on 30 April, the last trading day before Alpha FMC said it had received a non-binding indicative proposal from Bridgepoint. It’s a premium of 47.4 percent over the three-month average to that point and 42.9 percent over the six-month average.
The acquisition implies a multiple of around 15.3x Alpha FMC’s pre-IFRS 16 adjusted EBITDA for the twelve months ended 31 March of £39.9 million and a multiple of around 14.5x Alpha FMC’s post-IFRS 16 adjusted EBITDA for the 12 months ended 31 March of £42.2 million.
“Bridgepoint has strong experience of backing specialist consultants and we are excited to partner with the company and combine our breadth of knowledge of these financial services end markets and the technology ecosystems underpinning them with the bench of specialist capabilities that Alpha FMC has built over many years,” said Charles Welham, partner and head of business and financial services at Bridgepoint, in a statement.
The sector is expected to benefit from long-term growth drivers, including digital transformation, increasing financial services regulation, evolving product complexity, cost pressures and growth in assets under management, according to a release.
Bridgepoint will support Alpha FMC through organic growth and strategic M&A to add new capabilities, scale in existing territories and to potentially add new end markets and geographies, the release said.
Note: Bridgepoint owns PEI Group, the publisher of PE Hub Europe.
Gas fields
From digital transformation to energy transition, where Carlyle Group has agreed to acquire a portfolio of gas-weighted exploration and production assets in Italy, Egypt and Croatia from Energean.
Carlyle said in a statement that it believes that gas will “play a central role in the energy transition”.
The portfolio includes interests in Cassiopea, a gas field in Italy, and Abu Qir, a gas producing hub in Egypt.
The equity for the transaction will come from the Carlyle International Energy Partners fund.
IPO woe
It looks like a mixed picture out there in IPO land. Yesterday we covered Europastry, a frozen bakery business based in Barcelona and backed by MCH Private Equity, announcing its intention to float in Spain. But earlier in the week, Golden Goose, a luxury footwear company backed by Permira and counting pop superstar Taylor Swift among its customers, said it was postponing its Milan IPO despite having had “strong support across the investment community” and a book that was covered across the price range in the first hour of bookbuilding.
It cited “the significant deterioration” in market conditions, in particular in the luxury sector, following European Parliament elections where far-right parties performed well and the calling of a general election in France.
Golden Goose had set a price range of €9.50-€10.50 per share, implying a market cap of around €1.7 billion to €1.9 billion, last week.
I’d love to get readers’ thoughts on the impact of that political turbulence on any IPO plans. Is it likely to hit the whole market or, as Golden Goose’s note implied, will it just have an impact on sectors like luxury? Send your thoughts over to me at craig.m@pei.group