Q4 2020 EMEA PE-backed M&A Roundup

Despite the uncertainty and macro-economic challenges connected to the pandemic, the appetite for M&A seems to have been increasing moving into Q4. M&A activities continued to show signs of recovery against previous quarters of decline, exceeding also the Q3 performance (see Q3 article).

Deal Value and Count

Q4 recorded the highest M&A aggregate deal value compared to the last 8 quarters, with the majority of deals represented by institutional buyouts. Sourced from the Zephyr database by Bureau Van Dijk, Q4 saw a grand total of 6982 deals (+12% vis-à-vis Q3) with an aggregate deal value of $371bn (+60% vis-à-vis Q3). YoY quarter performance indicated a deal value increase of +62%, although the number of deals fell slightly at -7%.

Figure 1: Total Deal Value and Total Deal Count for Q4

The EMEA Deals

While the US private equity market was booming in the Q4, EMEA deals have slowed down, accounting for 19% of all PE deals in 4Q and for 28% of the global PE deal value. The last quarter of 2020 started with EQT, a Sweden-based alternative asset manager, completing the sale of its credit division to a UK-based private equity firm Bridgepoint for $4.3bn. EQT Credit had around €5.6bn of assets under management divided into direct lending and special situations investment funds. The division’s fate was under review since January 2020, as EQT wanted to focus more on the investment areas, in which the firm can fully utilize its governance and impact ownership model. Bridgepoint on the other hand, can continue diversifying its alternative assets investments strategies by merging its existing credit division with newly acquired EQT Credit, resulting in a business with c. €7bn of AUM.

At the end of November KKR acquired a 60% stake in Wella, a carve-out of the Professional and Retail Hair business of Coty, an international perfume and cosmetics manufacturer. The business, consisting of Wella, Clairol and ghd brands, was valued at $4.3bn on cash-free debt-free basis, equal to 12.3x FY2019 adjusted EBITDA. KKR invested both through its American and European fund. Coty received c. $2.5bn in net cash proceeds while retaining a 40% stake in the business. The deal came after KKR had already invested $750m in preferred equity in Coty, with another $250m contingent on the sale of the Wella unit. The preferred equity instrument can be converted into common shares giving KKR a 17% stake in Coty if its stock reaches $6.24.

The transaction was structured so that Coty would sell 60% of the Wella business to its subsidiary Waves UK Divestco, making it a restructuring deal. It will then sell a 100% stake in Divestco to Rainbow UK Bidco, an affiliate of KKR. After banks were unable to secure underwriting of such a large transaction amid the coronavirus pandemic, the deal was backed by a $1.3bn club loan, the largest in Europe since the 2008 financial crisis.

One of the largest exits in Q4 consisted of CVC Capital Partners selling Elsan Holdings, a France-based private hospitals operator, to KKR for €3.3bn. KKR holds a 43% stake in the company, the Bettencourt family owns 15% through its family office Tethys Invest, CVC retained a 12% stake while Ardian owns 8%. On October 23rd, the bid received approval of the European Commission and the transaction finalized on December 13th.

In November a consortium of Cinven, KKR and Providence Equity Partners completed the take-private of Masmovil, the 4th largest telecommunications operator in Spain, for €3bn at an offer price of €22.50 per share. The offer represented a premium of around 20% to its previous day unaffected share price. Providence was already one of the largest shareholders of Masmovil with a 9% stake, but after the acquisition each member of the consortium will own an equal stake in the telecommunications company.

Q4 has also seen increased activity in infrastructure and renewable energy investments. In December, EDP completed the sale of six hydroelectric plants in Portugal with a total value of $2.7bn to a consortium including Engie, Credit Agricole Assurances and Mirova. Engie acquired a 40% stake, Credit Agricole a 35% stake and Mirova the remaining 25%.

Nearing the end of 2020 Apollo Global Management, US-based alternative asset manager, and Hudson Executive Capital, US-based activist hedge fund, announced their bid for Cardtronics, UK-based ATM owner and operator services provider at $35 a share, valuing the company at $2.3bn including debt. However, in January Cardtronics ultimately accepted a rival bid from a US competitor NCR Corporation at $39 per share, terminating its agreement with Apollo.

Beyond EMEA

M&A activity also recovered in the rest of the world during Q4. US dominated both in terms of deal count and deal value, followed by China and UK.

Figure 2: Top global target countries/regions by deal count in Q4

Deal highlights reel


Country: US
Target: Epicor Software Corporation
Acquirer: Clayton Dubilier & Rice Inc.
Value: $4.7bn
Deal Type: Institutional buy-out 100%
Date: Oct 2020
Deal Outline: Clayton Dubilier & Rice Inc acquired Epicor Software from KKR at a $4.7bn deal value that includes the sale of patents, paving the way for a new partnership. This deal represents an exit by KKR which previously owned Epicor through KKR North American XI Fund LP.

Country: US
Target: Biomed Realty Trust Inc.
Acquirer: The Blackstone Group Inc.
Value: $14.6bn
Deal Type: Institutional buy-out 100%
Date: Nov 2020
Deal Outline: This deal is a secondary buyout, with the transfer of ownership of BioMed Realty from Blackstone Real Estate Partners VIII LP equity fund to an undisclosed fund managed by Blackstone. Existing fund investors were offered cash to exit BioMed, or an option to invest in the acquiror fund (and remain an investor in BioMed).

Country: US
Target: Univision Communications Inc.
Acquirer: Searchlight Capital Partners LP
Value: $10bn
Deal Type: Institutional buy-out 64%
Date: Dec 2020
Deal Outline: After the announcement by Univision to review strategic options including a sale of the company, numerous acquirors indicated interest including Churchill Capital Advisors, Hemisphere Media Group and Platinum Equity. Post auction bidding, Searchlight Capital Partners and ForgeLight entered a definitive agreement to acquire a majority stake from a consortium of private equity investment firms. Grupo Televisa will retain the remaining 36%.

Asia Pacific

Country: Australia
Target: Virgin Australia Holdings
Acquirer: BC Hart Aggregator (Bain Capital)
Value: $2.56bn
Deal Type: Institutional buyout 100%
Date: Nov 2020
Deal Outline: Virgin Australia Holdings faced high interest from potential acquirors, receiving 8 to 9 indicative bids and shortlisting 3 of them. Amidst the auction bidding, Virgin Australia Holdings entered voluntary administration to restructure and recapitalize the business. Eventually, Bain Capital via BC Hart Aggregator acquired Virgin Australia Holdings after its creditors accepted the proposed offer. Virgin Australia Holdings was delisted upon deal completion.

Country: China
Target: Longi Green Energy Technology Co Ltd
Acquirer: Hillhouse Capital Management Ltd
Value: $2.452bn
Deal Type: Minority stake 6%
Date: Dec 2020
Deal Outline: Hillhouse Capital Management acquired a 6% stake from Mr Li Chun’an, who originally held a 10.55% stake. In between the sale, Mr Li Chun’an sold more shares in the company via integrated bidding, with a remaining hold of 3.4% upon deal completion.


Closing 2020 on a positive note, M&A activities have rebounded in the year’s final two quarters despite the pandemic. One potential explanation is that the respective governments have implemented an array of measures to tide companies through the crisis, which boosted investor confidence in forecasting future performance of impacted firms. As we head towards 2021, we expect to see continued strength in M&A activities around the world, with the hopes that the pandemic-related uncertainty slowly makes room for more optimistic prospects.

Authors: Mateusz Król, Nessa Ng Tse Miang

Editor: Konstantin Brandt


Zephyr database