Equistone bolsters portfolio during pandemic with over 40 bolt-on deals

Equistone Partners Europe (“Equistone”), one of Europe’s leading mid-market private equity firms, is pleased to announce that it has supported 41 add-ons across its portfolio since the onset of the COVID-19 pandemic in March 2020. This constituted one of the busiest periods of buy-and-build activity in Equistone’s history, providing another avenue for productively deploying capital and creating value amid uniquely challenging market conditions and exemplifying the attractiveness of private-equity-backed platforms to entrepreneurs and management teams.

Equistone’s active pipeline of bolt-on deals was enabled by its extensive local origination capabilities across its seven offices in five European countries. These 41 transactions entailed 13 acquisitions by companies headquartered in the UK, including three in the space of a month by WHP Telecoms that helped double both the business’s headcount and revenue since Equistone’s initial investment. Both residential property management company FirstPort and technology-led marketing business Team ITG completed multiple add-ons as well. 

Equistone also supported 19 bolt-ons by portfolio companies based in France (including online office equipment retailer Bruneau’s acquisitions of Viking Spain and Office Depot Italy), eight by those in in the Benelux region (including five by Amadys, a provider of passive network equipment solutions) and one in Germany, namely RENA Technologies’ add-on of Hirtenberger Engineered Surfaces. The investment team’s experience of executing transactions in foreign markets was instrumental in over a quarter of these deals being cross-border acquisitions.

Commenting on this activity, Steve O’Hare, Senior Partner and UK Country Head at Equistone, said: “We’ve worked extremely closely with our portfolio companies over the past 21 months to help them tackle the operational and financial challenges presented by the pandemic. But after the initial shock, this has also been a period of significant potential opportunity. A well-capitalised mid-market company with a supportive private equity backer is incredibly well positioned to acquisitively grow its market share in a time of disruption, particularly when valuations have dipped in certain sectors. We’re pleased that we have been able to support so many of our investee businesses in consolidating their markets, adding on new capabilities and accelerating their strategic growth plans.”

Dominic Geer, Senior Partner at Equistone, added: “The challenges posed by the pandemic have also demonstrated the value of private equity backing to privately owned, mid-sized businesses. Covid has starkly illustrated the risk posed by future, equally unforeseeable economic downturns. This can be significantly mitigated by the access to capital, increased scale and operational support that comes with being part of a company with a private equity backer. That was undoubtedly an important factor in motivating management teams to explore sales to sponsor-backed platforms like our portfolio companies, even when their earnings weren’t directly affected by Covid.”