AURELIUS December Newsletter

22.12.2021

AURELIUS December Newsletter

We are pleased to share our December newsletter, updating you on the latest news from AURELIUS. 2021 has not been without its challenges, however, we are pleased to say AURELIUS recorded another successful year. This includes 10 platform investments including 7 carve-out transactions, 13 add-on acquisitions, 4 completed exits and the closing of a new €540 million mid-market private equity fund. We were also pleased to have expanded our European presence with the opening of a new office in Milan.

NEWS AND DEVELOPMENTS

New Mid-Market Fund

In April 2021, AURELIUS launched a new mid-market investment fund, AURELIUS European Opportunities VI, with over €540 million of firepower for European deals of which listed vehicle AURELIUS Equity Opportunities has committed up to EUR 160 million. The Fund’s first and final close for institutional investors followed an entirely virtual fundraising process that attracted commitments from a diverse group of prestigious institutional US and European investors. Through the fund, AURELIUS will continue its proven strategy of investing in operational transformation and corporate carve-outs in the European mid-market. The Fund will target equity tickets of up to €100 million in companies headquartered in Europe.

Mid-Market Transactions

A record-breaking deal for AURELIUS with the signing of McKesson UK for an enterprise value of £477 million. McKesson UK is the parent company to Lloyds Pharmacy, John Bell & Croyden and AAH Pharmaceuticals, the largest wholesale distributor of pharmaceuticals in the UK. The company is focused on playing a key role in the UK healthcare market including tackling the COVID-19 pandemic. The deal is subject to completion and will be supported by AURELIUS new fund, AURELIUS European Opportunities IV. » Read announcement

The carve-out of Panasonic Consumer Energy from Panasonic Europe B.V. was completed in June 2021. The company is one of the leading producers of consumer batteries in Europe, employs around 900 people and generated revenue of approximately €229 million in 2020. The transaction is the first to be completed under the new co-investment structure between AURELIUS Equity Opportunities and AURELIUS European Opportunities IV. » Read announcement

AURELIUS completed the acquisition of SSE Contracting Ltd from SSE Plc in July 2021. Recently rebranded to Enerveo, the company is a leading multi-disciplinary mechanical and electrical contracting business and as a standalone company represents one of the UK and Ireland’s biggest contracting businesses. » Read announcement

The most recent acquisition is the carve-out of Minova from Orica Ltd which was signed in December 2021. Minova is a global manufacturer and provider of mining and infrastructure essentials. The deal is valued at approximately AUD 180 million. » Read announcement

Exits

Following a series of 3 country disposals over the last months, AURELIUS successfully completed the exit of Office Depot Europe in November 2021. Office Depot Europe was acquired by AURELIUS in 2017 as a corporate carve-out from US-based Office Depot Inc and has undergone extensive realignment since then before strategic country exits were executed. » Read announcement

AURELIUS successfully completed the sale of Wychem Ltd to Ascensus Specialties, a US-based provider of specialty chemicals, following five years of ownership. The transaction resulted in a money-over-money multiple of 10.6x for AURELIUS. » Read announcement

Portfolio Development

Over the course of 18-months under AURELIUS ownership, Distrelec Group recorded its most successful financial year in the company’s history. Part of the company’s large success is attributable to AURELIUS Operating Partner, Stephan Rahmede, who initiated a comprehensive digitisation and performance improvement programme in his capacity as AURELIUS Manager and Interim CEO. On 1 October 2021, Holger Ruban succeeded Stephan as CEO to help continue Distrelec’s run of recent success and lead the company through its next growth transformation. » Read announcement

AURELIUS’ two photo and video businesses, Calumet and Wex Photo Video, were brought under one umbrella brand, European Imaging Group. EIG is Europe’s leading omnichannel retailer of photographic and video equipment for enthusiasts and professionals. Further growth is expected via new acquisitions across Europe. » Read announcement

Corporate Carve-out Survey

We published the findings of our fifth annual Corporate Carve Out survey earlier this year. Many thanks to everyone who took part. Set against the backdrop of the COVID-19 pandemic, the findings showed that the most important factor for corporate sellers of non-core assets is a potential buyer’s ability to execute the transaction, a trend likely to continue through the economic recovery period. We published the findings in a short report which can be read here.

Team News

Over the course of 2021, the AURELIUS team has grown from strength-to-strength, bolstered by new staff hires and expansion of our European offices. In total, AURELIUS made 37 new hires across all its offices. In September 2021, AURELIUS was delighted to announce the opening of its new Milan office alongside the appointment of Ludovico Denza as Managing Director and Head of Italy. AURELIUS has long been active in Italy and is committed to further expanding its business and investment activities to capitalise on the vast opportunities the Italian market represents.

Outlook for 2022

From the beginning of the year, the focus has been realigned from its traditional strategy and now rests on three pillars: platform investments, bolt-on acquisitions and co-investments. Platform investments provide an excellent basis for strategic reorientation based on organic growth while strategic bolt-on acquisitions serve to strengthen the existing portfolio companies by generating additional profitable growth. The co-investment strategy has been supported by the addition of our new mid-market fund and has allowed AURELIUS to target higher ticket transactions.

We hope to advance this strategy, further broaden our spectrum of investments and capitalise on the opportunities available across the European market. Our acquisition pipeline is already looking promising, and we hope to commence 2022 with a strong start to our investment activities.

From everyone at AURELIUS, we would like to thank all our partners and advisors for their support over the course of the year. We look forward to continuing this success as we move into 2022. Until then, we wish you Happy Holidays and a successful, healthy and happy New Year!

Best wishes

Tristan Nagler