Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
US private equity group TPG is nearing a €7bn deal to acquire the German metering company Techem, in a takeover that would rank among the largest such transactions between buyout groups in Europe this year.
TPG may reach an agreement to acquire Techem from Switzerland’s Partners Group for up to €7bn as soon as Monday, according to people familiar with the matter. The timeline might yet slip and no final decision had been taken, they cautioned.
Founded in 1952, Techem now has roughly 60mn devices around the world that offer homeowners and tenants data on their energy and water usage. It has nearly 4,300 employees and generates more than €1bn of total sales, according to its website.
The company is part of a sector that has experienced rising investor appetite as it benefits from the energy transition and consumer shifts towards more sustainable power usage. In the past year, the private equity group KKR acquired the UK’s Smart Metering Systems in a £1.4bn deal.
Private equity groups are also under growing pressure to distribute cash to their backers to compensate for a broader slowdown in initial public offerings and takeovers.
The Singaporean sovereign wealth fund GIC will invest alongside TPG in the deal, according to people familiar with the matter. TPG will make the investment through its TPG Rise Climate fund, which is directed at sustainability-focused investments.
Quebec pension fund CDPQ, one of Techem’s largest backers, is selling its 24.5 per cent stake as part of the deal, according to a person familiar with the matter. CDPQ declined to comment.
A sale by Partners Group of Techem to TPG would rank among the largest deals between PE firms in Europe this year. The number of transactions has been depressed by uncertainty caused by market turbulence and current high interest rates.
The group is also is in talks to buy a stake in Europe’s largest second-hand fashion site Vinted at a €5bn valuation, the Financial Times has previously reported.
Partners Group led a consortium to acquire Techem in 2018 in a €4.6bn deal. Techem had previously been delisted by Macquarie immediately before the financial crisis.
Partners Group had $149bn in assets under management at the end of June. TPG has $229bn of assets under management.
Representatives for Partners Group, TPG and GIC declined to comment.
Read the full article here