French investment firm Wendel SE is exploring a potential acquisition of mid-market private equity firm IK Partners, according to people familiar with the matter.
(Bloomberg) — French investment firm Wendel SE is exploring a potential acquisition of mid-market private equity firm IK Partners, according to people familiar with the matter.
Family-backed Wendel has made an initial approach to IK Partners, the people said, asking not to be identified because the information is private.
IK Partners focuses on deals in the Benelux market, DACH region, France, Nordics and the UK. Since it was founded in 1989, the European private equity firm has raised more than €14 billion of capital and invested in about 180 companies, according to its website.
Bloomberg News reported last year that IK Partners was considering a potential initial public offering that could value the firm at about $1.5 billion. IK Partners could end up fetching a lower valuation now given the headwinds that have emerged in the private equity industry since that time.
Smaller private equity firms have been getting snapped up by larger players as the industry grapples with the impact of rising interest rates.
Last month, Bridgepoint Group Plc agreed to acquire infrastructure investor Energy Capital Partners, while CVC Capital Partners struck a deal for DIF Capital Partners. Arjun Infrastructure Partners has also been exploring strategic options, people with knowledge of the matter have said.
A deal for IK Partners would dovetail with the fresh strategic direction announced by Wendel in March. The company, which previously invested from its own balance sheet, laid out an ambition to develop a new asset management business overseeing third-party money.
Wendel also said it would adopt an active portfolio management strategy with the aim of investing €2 billion of equity within two years. The firm is led by Group Chief Executive Officer Laurent Mignon, who joined last year after working in top positions at French lender Natixis SA and its parent company Groupe BPCE.
Shares of Wendel have fallen 16% in Paris trading this year, giving the company a market value of about €3.3 billion ($3.4 billion). Deliberations are ongoing and there’s no certainty they will lead to a transaction.
Representatives for Wendel and IK Partners declined to comment.
Other European investment firms have also been seeking to diversify their product offerings and tap new sources of capital.
CVC is considering an Amsterdam initial public offering as soon as the coming months, people with knowledge of the matter have said. Rival EQT AB has been expanding through acquisitions, agreeing last year to buy Baring Private Equity Asia to boost its presence in the fast-growing region.
–With assistance from Alexandre Rajbhandari.
(Updates with details on Wendel strategy from seventh paragraph.)
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