Hellman & Friedman and Blackstone have agreed to buy a majority stake in Germany’s Scout24 in a deal that values the online classifieds company at roughly €5.7 billion (about $6.4 billion), including debt. The pair are set to pay €46 per share in a move that would keep Scout24 publicly listed, topping a previous bid from the two firms of €43.50 per share that Scout24 had rejected last month. The new offer marks an 11% premium to the company’s closing stock price on Thursday.
This isn’t H&F and Blackstone’s first dalliance with Scout24, which offers online classifieds through home listings site ImmobilienScout24 and car listings site AutoScout24. The firms originally acquired control of the business in 2014, paying about €1.5 billion to take a 70% stake from Deutsche Telekom. The next year, they helped Scout24 go public in Frankfurt in a listing that established an initial market cap of €3.2 billion.
In the years since, the company’s stock price has generally ticked up, driven in part by a German housing boom fueled by low interest rates—some of the same factors behind the recent stock increase of US mortgage software company Ellie Mae, which was the target earlier this month of another major private equity deal. But Scout24 has struggled the past year, with its stock dipping below €35 per share in October as housing costs across Germany have soared.
That’s prompted initial speculation that H&F and Blackstone might be seeking to buy the company at a discount, and that strategic counterbidders could still emerge. The deal may include measures to prevent such a move. H&F and Blackstone’s new Scout24 takeover comes with a minimum acceptance threshold of just over 50%, a relatively low figure that could help prevent activist investors from swooping in and fighting to increase the price at the 11th hour.
The deal comes amid a European PE environment that saw a 4.5% drop in deal value and a 12.8% decline in deal count last year following a record-breaking 2017, per PitchBook’s latest European PE Breakdown. Here’s a look at the last decade-plus of data:
In terms of big-money deals, at least, 2019 is off to a decent start. Reports emerged earlier in February that Bain Capital and The Carlyle Group were in talks to buy Osram Licht, a German lighting company, in a deal the could value it at more than €4 billion. And last month, Advent International, Bain Capital and others backed a reported $6 billion acquisition of payment software company Concardis through an add-on with portfolio company Nets.
Want more data on European dealmaking? Check out our full 2018 Annual European PE Breakdown.
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