Far Point goes Global

BY Richard Summerfield

The blank cheque FinTech firm Far Point Acquisitions has agreed to acquire shopping tax refund company Global Blue in a $2.6bn deal. The deal is expected to close in the second quarter of 2020.

Far Point’s majority owner, private equity investor Silver Lake, will retain around 42 percent of the combined company, according to a statement announcing the deal. Under the terms of the deal, Far Point will invest $650m in cash, while Ant Financial and Third Point have agreed to invest a total of $350m in the newly combined company.

Far Point is a special purpose acquisition company (SPAC) established by hedge fund Third Point LLC and ex-New York Stock Exchange president Thomas Farley. Going forward, Global Blue’s chief executive Jacques Stern will continue to lead the combined company, and Mr Farley will become chairman of the firm.

“Global Blue is the clear market leader in the attractive and growing Tax Free Shopping ecosystem worldwide,” said Mr Farley. “The company has achieved remarkable progress in digitalization, geographic expansion and strategic value creation under Jacques’ leadership and the stewardship of its existing shareholders, including controlling shareholder Silver Lake, whose principals I have known personally and professionally for years. I look forward to working with Global Blue to capitalize on favorable trends in the business, including the growth of the emerging markets middle-class, positive VAT dynamics, and further digitalization.”

“I am delighted about this collaboration with Far Point and Tom, as I believe it will help create long-term value for Global Blue and its shareholders,” said Mr Stern. “In recent years, we have built a true leader in our industry, powered by a cutting-edge integrated technology platform. We strongly believe that continued investment in innovation will bring value to all our partners and customers, and we look forward to accelerating our strategic collaboration with Ant Financial as a showcase of such innovation.”

The new public company will be incorporated in Switzerland and will trade as Global Blue upon closing.

News: Far Point to buy tax-free shopping firm Global Blue at $2.6 billion valuation

Thoma Bravo secures Sophos deal

BY Richard Summerfield

Software-focused private equity firm Thoma Bravo is to acquire UK cyber security firm Sophos for $3.8bn.

Thoma Bravo’s takeover offer of $7.40 pence per share represents a 37 percent premium over Sophos’s closing price on Friday, the last day of trading before the deal was announced.

The board of directors of Sophos have stated their intention to unanimously recommend the offer to the company’s shareholders and the deal is expected to complete during the first quarter of 2020, pending customary closing conditions and regulatory approvals.

Thoma Bravo raised billions for its latest private equity fund this year, and has increasingly focused on the cyber security space. In 2018, the firm bought Imperva and Veracode. Though the firm has acquired more than 200 software and technology companies during its 40-year history, including holding stakes in other cyber security firms such as Tripwire, Blue Coat, Sonicwall, Digicert and Entrust, Sophos will be its first acquisition outside the US.

"We are excited by the opportunity to partner with the Sophos management team and employees as we further develop Sophos as a best-in-class software franchise and nextgen security leader,” said Seth Boro, a managing partner at Thoma Bravo. “The acquisition fits with our strategy of investing in and growing software and technology businesses globally. The global cybersecurity market is evolving rapidly, driven by significant technological innovation, as cyber threats to business increase in scope and complexity. Sophos has a market-leading product portfolio and we believe that, by applying Thoma Bravo’s expertise, operational framework and experience, we can support the business and accelerate its evolution and growth.”

“Today marks an exciting milestone in the ongoing journey of Sophos,” said Kris Hagerman, chief executive of Sophos. “Sophos is actively driving the transition in next-generation cybersecurity solutions, leveraging advanced capabilities in cloud, machine learning, APIs, automation, managed threat response, and more. We continue to execute a highly-effective and differentiated strategy, and we see this offer as a compelling validation of Sophos, its position in the industry and its progress.”

“It is the view of the Sophos Board that this is a compelling offer for Sophos shareholders which secures the delivery of future value for shareholders today,” said Peter Gyenes, chairman of Sophos. “Thoma Bravo has deep sector expertise in cybersecurity software as well as a long and successful track record of partnering with and investing in its portfolio companies to support long-term growth and success. Under Thoma Bravo’s ownership we expect Sophos to accelerate its evolution and leadership in next-generation cybersecurity. The Sophos board believes that this recommended offer delivers a significant opportunity for all stakeholders – our shareholders, customers, partners, and employees.”

News: Buyout firm Thoma Bravo adds Sophos to cybersecurity chest in $3.8 billion deal

Vista acquires Acquia for $1bn

BY Fraser Tennant

In a deal which highlights its preference to purchase undervalued tech companies and turn them around for a big profit, US investment firm Vista Equity Partners has acquired web content management and digital experience company Acquia for $1bn.

Following completion of the transaction, Acquia will continue to operate independently.

According to Acquia’s chief executive Michael O’Sullivan, Vista’s investment will enable Acquia to grow its presence in the digital experience platform (DXP) market, as it continues to innovate and serve the world’s most ambitious brands. Acquia currently serves more than 30 companies in the Fortune 100.

“Vista shares our belief that the DXP market is ripe for disruption and we are excited to partner with them to accelerate our plans,” said Mr O’Sullivan. “Over 4000 Acquia customers crave faster innovation, greater agility and better integrations than legacy marketing cloud providers can deliver. Vista’s support will allow us to invest more in R&D, expand faster, and get products to market quicker.”

With Vista’s backing, Acquia will maximise recent investments to take on legacy DXP providers and capture new market share. Vista’s portfolio of more than 60 companies and more than 70,000 employees, combined with its operational expertise, provides Acquia access to a vast community of resources, peers and practice experts.

A value-added investor with a long-term perspective, Vista exclusively invests in enterprise software, data and technology-enabled companies. “The world’s leading and most innovative digital brands understand that their ability to deliver a seamless digital customer experience is essential to their success,” said Robert F. Smith, founder, chairman and chief executive of Vista. “Acquia understands this and is leading the way in providing innovative solutions to its customers while, at the same time, giving back to the open source community.”

The Vista/Acquia transaction is expected to close in the coming weeks and is subject to customary closing conditions and regulatory approvals.

Mr Smith concluded: “We are thrilled to partner with Acquia and believe the company is well-positioned to capitalise on the tremendous opportunity in the DXP marketplace.”

News: Vista Equity Partners buys Acquia for $1B

PE fundraising strong in CEE reveals new report

BY Fraser Tennant

Private equity (PE) fundraising for Central and Eastern Europe (CEE) hit the highest annual level in a decade in 2018 with €1.8bn, according to a new report by Invest Europe.

In ‘2018 Central and Eastern Europe: Private Equity Statistics’, the association reveals that buyout funds in CEE raised a total of €1.1bn last year, while the region’s venture capital (VC) funds attracted over €500m for the second year running.

Furthermore, PE investment into companies across CEE reached €2.7bn, the second-highest amount ever achieved, following 2017’s record €3.5bn. The number of companies backed increased by 50 percent year-on-year to almost 400, also the second-highest level on record. This was driven by a sharp increase in CEE companies supported by VC.

The number of PE and VC-backed exits in CEE also reached an all-time high in 2018, with 128 companies divested. This represented a total value of over €1bn for the fifth year running, measured at historical investment cost. Poland accounted for over half of this total exit value with €575m.

“The strong levels of private equity fundraising, investment and exit activity in Central and Eastern Europe in 2018 demonstrate that the region continues to develop as an attractive investment destination,” said Robert Manz, chair of Invest Europe’s Central and Eastern Europe Task Force. “Global investors see that private equity and venture capital investment is one of the best ways to access the region’s robust markets and high-growth companies.”

In addition, Poland saw CEE’s highest amount of PE investment with its companies receiving €850m in total last year, while the Czech Republic saw €767m invested into its companies via PE and VC funds. Hungary had the highest number of companies receiving investment with over 190 backed last year, almost half of the regional total.

In terms of sectors, biotech and healthcare saw the highest share of CEE’s PE investment, with 32 percent of the total value in 2018, while consumer goods and services companies received 27 percent of funding.

The report also notes that the CEE region also has strong technology start-up credentials, including Czech cyber security group Avast – which was 2018’s largest tech initial public offering (IPO) on the London Stock Exchange at a valuation of £2.4bn.

Report: 2018 Central and Eastern Europe: Private Equity Statistics

Bain buys 60 percent stake in Kantar

BY Richard Summerfield

Bain Capital is to acquire a 60 percent stake in data analytics firm Kantar from debt-laden British multinational advertising and public relations company WPP.

The deal values Kantar at about $4bn. The sale will give WPP agencies, including Ogilvy and Wunderman Thompson, an infusion of funds to reduce their debt and rebuild. WPP said it will use about 60 percent of the proceeds of the sale to cut its net debt to the low end of a targeted range of 1.5-1.75 times core earnings for 2020. The rest of the money will be returned to shareholders. The deal is expected to close in early 2020, subjected to approval from WPP shareholder and regulatory approval.

Private equity giant Bain was engaged in an auction for Kantar and is believed to have overcome Apollo Global Management, Platinum Equity and Vista Equity Partners in the final round of bidding.

“Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential,” said Mark Read, chief executive of WPP. “As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities. I would like to thank Eric Salama, his team and everyone at Kantar for their tremendous contribution to WPP – a contribution that will continue as we develop the business together. This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8 percent of our current market value to shareholders planned, we are making good progress with our transformation.”

“Kantar is a market leader in many areas and we are excited to be partnering with its management team and WPP to build on this remarkable platform for growth,” said Luca Bassi, a managing director at Bain Capital Private Equity. “We see many opportunities for expansion and will invest in technology to expand the company’s capabilities and reinforce its global leading position.”

“Our new ownership structure presents a great opportunity for Kantar, our employees and our clients,” said Eric Salama, chief executive of Kantar. “In Bain Capital we have a partner who shares our ambition, brings relevant expertise and – with WPP – can help us accelerate our growth and impact for clients. We are focused on delivering ‘human understanding at scale and speed’ and the ‘best of Kantar’ more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider.”

News: Bain Buys Huge Stake in Market Research Business for $4 Billion