News & Analysis

driven by the PitchBook Platform

Perks of going private: It’s not just Cobham falling off the public radar

The battle for Cobham is drawing to an end with Advent International emerging victorious. The £4 billion (around $5 billion) takeover is the latest in a recent string of public-to-private deals.

Advent International has won the fight against Cobham‘s family to take control of the British defense and aerospace company in a deal worth £4 billion (around $5 billion). The PE firm’s 165 pence per share bid won the approval of around 93% of shareholders, well above the 75% threshold needed.

This news is the culmination of months of negotiations and represents just one of the high-profile take-private deals that have been announced this year. The amount of money spent on public-to-private transactions in Europe has spiked over the past couple of years. 2018 saw a record €25.9 billion (around $28.5 billion) invested across 28 deals, up from €8.1 billion funneled into 23 deals in 2017 and similar figures witnessed in the preceding years, per PitchBook data.

The flurry of activity comes at a time of record-low interest rates in Europe, which have allowed private equity firms to secure financing at a cheaper rate. Meanwhile, the private markets are bigger than ever: Between 2009 and 2018, $2.6 trillion has flowed into PE funds, according to a recent PitchBook report on private markets. And McKinsey reported that global private equity net asset value has grown 7.5 times since 2002—twice as much as public market capitalization.

With this amount of growth, it’s a good time to be private and it makes sense that larger companies are jumping on the take-private bandwagon. Using PitchBook data, we’ve compiled a list of the biggest deals that have been announced this year in Europe, with their values in parentheses.

Merlin Entertainments (£5.9B)

Having failed twice before, Blackstone finally agreed to buy UK-based Merlin Entertainments alongside Canada Pension Plan Investment Board and KIRKBI, an investment vehicle controlled by the Lego brand’s founding family. If completed, the June offer of 455 pence per share would give the investors control of a group that pulled in 67 million visitors to its attractions in 2018, generating revenue of £1.7 billion.

Cobham (£4B)

Although certainly not a sure thing when originally announced in July, the deal is on surer footing now. If completed, the takeover would be the biggest private equity buyout of a company focused on aerospace and defense. Cobham has been struggling with its finances in recent years and its pre-tax profit has been dwindling since 2015, standing at £155.2 million in 2018 on revenue of £1.86 billion.

Inmarsat ($3.4B)

After almost 15 years, Inmarsat, which is said to be the UK’s largest satellite company, is set to return to private hands. In March, a consortium including Apax Partners and Warburg Pincus agreed to pay $7.21 per share in cash—a reported price tag of around $3.4 billion—for the business, which Apax had originally backed in 2003 before it floated in 2005. The deal is currently under investigation by UK regulators over fears that it might reduce competition in the market, according to the Financial Times. Inmarsat has also been linked to other takeover talks; the company is said to have rejected two bids from rival EchoStar last year.

BCA Marketplace (£1.9B)

London-based TDR Capital agreed to acquire BCA Marketplace, an auto sales services provider, in June. In the year to March, the British business, which owns We Buy Any Car, generated revenue of £3 billion and EBITDA of £172 million. The 243 pence per share offer was reportedly lower than the 275 pence per share price tag targeted by the company.

Ei Group (£1.27B)
TDR Capital makes a second appearance in Europe’s top public-to-private buyouts this year, backing Stonegate Pubs’ takeover of the UK’s largest pub chain, Ei Group, to create a company with nearly 5,000 pubs. Ei fetched a price tag of 285 pence per share in the July deal, which represented a 38.5% premium on its closing price the day before the announcement. The deal injects new life into what is an ailing industry in the UK. A recent report by Alix Partners and CGA revealed that as of June 2019, there were 2,920 fewer licensed premises in the country than a year ago.

Featured image via Maxiphoto/iStock/Getty Images Plus

  • leah-hodgson-photo.jpg
    Written by Leah Hodgson
    Leah Hodgson is a London-based senior reporter for PitchBook covering venture capital across Europe and the Middle East. Leah graduated from the University of Surrey with a BA in international politics with French. She has previously been a radio reporter in France. She later turned to financial journalism, covering the wealth management industry. She joined PitchBook in 2018.
Join the more than 1.5 million industry professionals who get our daily newsletter!