Wed 09/02/2020 11:28 AM
The European Mid-Market is returning into action after auctions were put on hold during the Covid-19 crisis. Leverage on new deals will be around 5x for strong credits, from about 4x around the lockdown period, sources told Reorg. Continue reading for more analysis of middle market mergers and acquisitions from the EMEA Middle Market by Reorg team, and request a trial to access even more coverage of mergers and acquisitions. 

Investors’ interest in private credit has grown considerably in the first half of this year compared with the same period in 2019, according to Preqin’s Alternative Assets H2 2020 report. The report outlines that the proportion of investors planning to commit more capital to debt funds has risen to 48% in June from 39% in June 2019.

Direct lenders are expected to commit funds to support LBOs, MBOs, refinancing and recapitalisation of the region’s mid-size companies in September. France, Germany and the Netherlands, are among the regions that are set to record the most activity, sources said.

Given that the M&A market is starting to gain momentum in September, debt deal flow is expected to increase for the upcoming six months, according to market participants.

In terms of sectors, technology, and particularly software, healthcare, education and businesses related to the food industry are the spaces which will remain active during September, sources said.

Here’s a snapshot of some mid-market debt deals Reorg is tracking:

MHP Solution Group
The Elvaston Capital-owned German logistics software business is expected to come to market this September.

Next e.GO Mobile
German electric car manufacturer which has recently been acquired by private equity firm ND Industrial Investments is expected to refinance.

BlackFin Capital Partners is working with a financial advisor for the sale of its French health insurance business Santiane.

Capgemini-owned French cloud business’ sale is ongoing, sources said. The acquisition is expected to be supported by financing.

Latour Capital owned-French network infrastructure and digital communication systems Sogetrel is expected to come to market this September.

SK FireSafety
Apax-owned Dutch group SK Fire Safety sale is expecting to fetch a price tag of about €120 million to €130 million, based on €15 million EBITDA and a multiple of about 8x. The group’s leverage level should be between 4.5x and 5x, as reported. KPMG is running the process.

The ongoing sale of the Belgium-based animal feed business Innovad, could fetch a valuation of €240 million based on €20 million EBITDA and a multiple of 12x. Leverage levels should be about 5x to 5.5x, sources said. ING Amsterdam runs the sale, as reported.

NMC health is selling its Spanish asset fertility clinic Eugin. The business is expected to fetch about €300 million based on €30 million 2019 EBITDA and a valuation multiple of 10x, as reported.

Spanish Portobello-owned regulated on street business Eysa is expected to be put on sale this September. The business has about €20 million EBITDA.

-- Lucia Camblor, Kerstin Kubanek
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