A Goldman Sachs Asset Management unit is reported to be in talks to buy testing and inspection group Celnor from Inflexion for about £900 million. A consortium led by Centerbridge, with Mubadala, is reported to be in talks to buy Canaccord Genuity's UK wealth business for about £1 billion.
British mid-market companies are changing hands at around £1 billion, and the buyers are not all traditional private equity firms.
A report on Wednesday said Goldman Sachs Asset Management is looking to acquire Celnor Group, a UK testing and inspection business, from Inflexion Private Equity for about £900 million. A separate report on Tuesday said a consortium led by Centerbridge and including Mubadala, Abu Dhabi's state investor, is in talks to buy Canaccord Genuity's UK wealth management business for about £1 billion. No company has confirmed either.
Celnor
The reported price of about £900 million would be a sponsor-to-sponsor exit, in which one private equity firm sells to another buyer with a fund behind it. It is not clear whether the £900 million is equity value or enterprise value, which Goldman fund would buy, how the purchase would be financed, or what Inflexion paid. No company statement has been issued.
Canaccord Genuity's UK wealth unit
The Canaccord talks follow an earlier process. The Centerbridge-led consortium is in talks after exclusive discussions with Warburg Pincus and Clayton, Dubilier & Rice lapsed. That means the asset has already passed through at least one round of buyers and, if the report is right, found another at around £1 billion.
What the two have in common
Both deals are reported to be at the stage of talks, not signed agreements. Both involve sellers that are disposing of a business to a better-capitalized buyer. And both illustrate the range of capital now chasing UK assets: a bank's asset management arm for a testing and inspection business, and a sponsor-plus-sovereign consortium for a wealth business.
Two readings
One reading is that appetite for mid-market UK assets remains strong. Buyers with different sources of capital are lining up for businesses at £900 million to £1 billion, and a process that lapsed with one pair of bidders found another.
The other reading is that these are reports, and reports of talks do not always become signed deals. Neither company has commented, the valuation basis for Celnor is unknown, and Canaccord's process has already changed hands once.
What to watch
A statement from Inflexion, Goldman Sachs or Canaccord; a signed agreement; the valuation basis and financing for each; and whether other processes at similar sizes are launched. A signing announcement for either would show whether the reported prices hold.