Vectura deal suggests private equity takeover pipeline remains healthy

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The agreed purchase of Vectura Group PLC (LON:VEC) nudged up the total spent by private equity groups on UK firms by another GBP1bn, with plenty more still expected where that came from.


Carlyle Group’s deal for the FTSE 250-listed group today takes the total spent in private equity-backed mergers & acquisitions (M&A) since the start of last year up to GBP37bn, based on data from Dealogic shared with the Daily Mail.


The number of deals is now 124, if Vectura is added to the Dealogic calculations.


It comes a week after private equity giant KKR swooped to buy infrastructure firm John Laing for GBP2bn.


Since the start of the year, remote power provider Aggreko agreed to be taken private for GBP2.3bn (though this may prove problematic), Signature Aviation for GBP3.5bn by a consortium including private equity interests, and security group G4S has been snapped up by a private equity-owned rival for GBP3.8bn.


Asda’s near-GBP7bn takeover was completed in February, with a consortium including the Issa brothers and private equity group TDR Capital.


Despite the ongoing recovery in the FTSE 100 and FTSE 250, the continuing stream of bid suggests people are still seeing plenty of value in UK companies, with valuations still seemingly depressed by the pandemic and lingering Brexit concerns.


With an estimated US$1.6 trillion backlog of dry powder still burning a hole across the private equity industry’s pockets, there is no reason why many more UK firms will not continue to be snapped up.


Next in line could be share registrar Equiniti PLC (LON:EQN), which is currently mulling a purported sixth bid from PE group Siris, and St. Modwen Properties PLC (LON:SMP), where the board said it would be amenable to a deal after receiving an approach about a potential GBP1.2bn deal from Blackstone.


Private equity firm Cinven or a rival may be a return for Sanne Group PLC (LON:SNN) after the provider of asset management services two weeks ago rejected a takeover offer that valued the company at GBP1.3bn.


There could also be action at J Sainsbury PLC (LON:SBRY), with takeover speculation swirling as a mysterious continental billionaire has upped his stake, and at ITV PLC (LON:ITV), where interest in the shares has distinctly cooled yet the content wars between the likes of Netflix, Disney and Amazon are getting ever hotter.


Other potential targets might include other companies with reliable cash flows and undemanding valuations.


Superyacht services group GYG PLC (LON:GYG), meanwhile, is still awaiting a decision from Harwood Capital, which earlier said it was evaluating a possible takeover offer.


The average premium to the share price for bids for UK listed companies over the six months to early May is around 36%, according to research by AJ Bell across successful, ongoing and even failed approaches.


“The number of bids, and the premium, suggests that someone, somewhere – be they trade or financial buyers – feel UK companies are still going cheap, with overseas buyers potentially attracted by how the pound still stands below the levels reached just ahead of the Brexit vote five years ago,” AJ Bell analysts said.


Six months of bids (private equity, trade sales and others)


Date – Company – Suitor/buyer


26-May Vectura Carlyle Group


26-May Spire Healthcare Ramsay Health Care


17-May Immunodiagnostic Systems PerkinElmer


14-May Sanne Group Cinven


07-May St Modwen Blackstone


06-May John Laing KKR


06-May Bacanora Lithium Gangfeng


19-Apr EquinitiSiris Capital


09-Apr GYG Harwood Group


24-Mar Gamesys Bally’s


23-Mar Tavistock Investments TEAM


18-Mar Trans-Siberian Gold Horvik


05-Mar Aggreko TDR, I Squared


08-Mar ADES International Innovative Energy, Saudi PIF and Zamil


26-Feb RDI REIT Starwood Advisers


08-Feb Nucleus Financial James Hay


08-Feb Arrow Global TDR Capital


05-Feb Aggreko TDR Capital / Isquared Capital


05-Feb French Connection Go Global +


01-Feb Innovaderma Creightons (2-for-3)


27-Jan Scapa Schweitzer-Mauduit


25-Jan AFH Financial Flexpoint


17-Dec Signature Aviation Global Infras Partners / Blackstone


11-Dec Calisen BlackRock / Mubadala


10-Dec Applegreen B&J / Blackstone Infrastructure


07-Dec IMImobile Cisco


04-Dec Hunters Property Property Franchise


25-Nov GoCo Future


25-Nov AA Towerbrook / Warburg Pincus


09-Nov Countrywide Connells


06-Nov Codemasters Electronic Arts


06-Nov Urban & Civic Wellcome Trust


06-Nov Sportech TBC


05-Nov RSA Intact / Tryg


03-Nov G4S Allied Universal


02-Nov LiDCO Masimo


02-Nov Horizon Discovery Perkin Elmer


Date
Company
Suitor/buyer
44342
Vectura
Carlyle Group
44342
Spire Healthcare
Ramsay Health Care
44333
Immunodiagnostic Systems
PerkinElmer
44330
Sanne Group
Cinven
44323
St Modwen
Blackstone
44322
John Laing
KKR
44322
Bacanora Lithium
Gangfeng
44305
Equiniti
Siris Capital
44295
GYG
Harwood Group
44279
Gamesys
Bally’s
44278
Tavistock Investments
TEAM Plc
44273
Trans-Siberian Gold
Horvik
44260
Aggreko
TDR, I Squared
44263
ADES International
Innovative Energy, Saudi PIF and Zamil
44253
RDI REIT
Starwood Advisers
44235
Nucleus Financial
James Hay
44235
Arrow Global
TDR Capital
44232
Aggreko
TDR Capital / Isquared Capital
44232
French Connection
Go Global plus two others (TBC)
44228
Innovaderma
Creightons (2-for-3)
44223
Scapa
Schweitzer-Mauduit
44221
AFH Financial
Flexpoint
44182
Signature Aviation
Global Infras Partners / Blackstone
44176
Calisen
BlackRock / Mubadala
44175
Applegreen
B&J / Blackstone Infrastructure
44172
IMImobile
Cisco
44169
Hunters Property
Property Franchise
44160
GoCo
Future
44160
AA
Towerbrook / Warburg Pincus
44144
Countrywide
Connells
44141
Codemasters
Electronic Arts
44141
Urban & Civic
Wellcome Trust
44141
Sportech
TBC
44140
RSA
Intact / Tryg
44138
G4S
Allied Universal
44137
LiDCO
Masimo
44137
Horizon Discovery
Perkin Elmer

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