April 08, 2016
The Deal: U.S. mid-market PE firms expand in Europe
By Armie Margaret Lee
In a recent story published in “The Deal – Pipeline,” OpenGate Capital featured prominently as a private equity firm with deep roots in Europe.
OpenGate Capital started its Paris office in 2007, the year it made its first acquisition in Europe: Paris-based semiconductor wafer manufacturer Ommic SA, a unit of Royal Philips Electronics NV. (OpenGate sold Ommic to Egalux SA Luxembourg in 2008). OpenGate, which has nine employees in the French capital, is “committed to having a European presence and will be considering expanding our portfolio management team as our investment activity in the region increases,” said OpenGate CEO Andrew Nikou.
Among its recent deals was the acquisition, completed in March, of Rennes, France-based building materials distributor Bois & Matériaux from Wolseley plc. Nikou said there’s a strong level of deal flow in the paper, packaging, chemicals and building materials sectors both in Europe and the U.S. OpenGate plans to make three to four investments in Europe each year, he said.
As corporations look to sell off legacy assets or non-core, non-strategic assets that yield very little contribution to the bottom line, we have seen more opportunities in the lower middle market come to fruition,” Nikou said. He added that OpenGate has been able to complete many proprietary transactions due to the firm’s cultural investment and years of direct dialogue with the corporate community in Europe.
“Entry valuations (for businesses in Europe) have been more attractive” compared to U.S. businesses, Nikou said, adding that there’s less competition in Europe from other lower middle market PE firms that “are either constrained by geographic limitations or they are lacking in resources to tackle complex carve-outs.”
To read the complete article, please go to: pipeline.thedeal.com.
