Legrand acquired Enovation Group Holding from Main Capital Partners

Stem op deze deal via de stempagina: https://mena.nl/genomineerden-best-deal-2024/

Name of the deal: Legrand acquired Enovation Group Holding from Main Capital Partners & Management
Date announced and/or closed: 23 april 2024
Published value: € 500 – 1000 million
Buyer(s): Legrand
Target: Enovation
Seller: Main Capital Partners

Involved firms and advisor

Involved firms and advisors buy side:
KPMG
Baker Mckenzie

Involved firms and advisors target:
Rothschild, Deloitte, Loyens & Loeff, EY P

Involved firms and advisors sell side:
Rothschild, Deloitte, Loyens & Loeff, EY P

Pitch

Brief description deal / Deal outline
Legrand is a French publicly listed specialist in electrical and digital building infrastructures and digital care solutions, dedicated to supporting technological, societal and environmental change around the globe. Under Main’s stewardship, Enovation expanded its market-leading position in the healthcare industry and successfully became one of the few healthcare software providers to cover a wide spectrum of the connected care ecosystem with a presence in Northwestern Europe. This strategic exit represents yet another successful exit for Main in one of its core product-markets and marks Main’s largest exit in its history.

About Legrand
Legrand Care is a brand specialising in the innovative development of connected solutions for the health and social care sectors. Legrand care is born from the integration of the brands that make up the Assisted Living and Healthcare (AL&HC) business unit of Legrand: Intervox, Neat, Tynetec, Jontek and Aid Call. With more than 40 years of knowledge and experience, the brands are brought together with shared values under a common strategic vision. The first half of 2024, Legrand reported net sales of €4.21 billion, down 2.0% from the previous year, with declines noted particularly in Europe. Gross profit decreased slightly to €2.21 billion, and adjusted operating profit fell to €873.1 million. The company remains focused on acquisitions and product innovation, with plans for continued growth

About Enovation
For more than 40 years, Enovation has been bringing technology and healthcare together. By facilitating digital care and collaboration between people, we make the care of today and the future possible. This is how we contribute to the sustainable healthcare system of the future, in which the human experience remains at the centre. Thanks to our platform, healthcare providers can focus on what is most important: time and attention for people. Our software supports digital care and collaboration throughout the patient journey. From early detection to remote monitoring and everything in between, our platform facilitates integrated care – at every step.

Enovation generates about €75 million in revenue, up from the €25 million it was booking in 2018 when Main Capital invested.

About Main Capital Partners
Main Capital Partners is a private equity firm based in the Netherlands, focused on investing in software companies. The firm specializes in helping medium-sized to large software enterprises scale and expand through growth capital, strategic guidance, and operational support. Their investment strategy centers on the software industry, particularly enterprise software, with a focus on profitable companies that have a recurring revenue model. Main Capital typically takes a long-term approach to its investments, often partnering with management teams to drive sustainable growth, both organically and through acquisitions. They emphasize creating value through strategic development, such as enhancing product offerings, improving operational efficiency, and expanding geographically. The firm operates primarily in the Benelux, DACH (Germany, Austria, Switzerland), and Nordic regions, with a portfolio of companies across various software verticals, including healthcare, finance, and cybersecurity. Main Capital is known for its sector expertise and deep knowledge of software business models, making it a preferred partner for many technology companies looking to scale their operations and market reach.

Why should this deal win the Award  for  Best Deal 2024?
Legrand is a French publicly listed specialist in electrical and digital building infrastructures and digital care solutions, dedicated to supporting technological, societal and environmental change around the globe. Under Main’s stewardship, Enovation expanded its market-leading position in the healthcare industry and successfully became one of the few healthcare software providers to cover a wide spectrum of the connected care ecosystem with a presence in Northwestern Europe.

In 2018, Main Capital Partners made its strategic investment in Enovation and started its collaboration with the management team of Enovation. During its cooperation with Main, Enovation transformed its profile significantly from a secure communication and information exchange vendor in the Dutch healthcare market, to a leading European connected care and eHealth platform provider focused on digital care and collaboration throughout the entire patient journey, currently employing around 300 FTE.

Supported by Main, Enovation significantly grew its software business, both organically as well as through eight selective strategic add-on acquisitions that broadened the company’s product portfolio and expanded its addressable market.

Main’s CEO Charly Zwemstra has served as Chairman of the Supervisory Board during Main’s investment period, in which, Enovation’s revenues nearly tripled and the international footprint improved significantly from a primary focus on the Dutch market to activities in almost 20 countries. Enovation is well positioned to further capitalize on these achievements in the coming years, contributing further to digitizing the healthcare sector throughout Europe. This step of joining Legrand enables Enovation to leverage their joint expertise and knowledge to continue Enovation’s mission to contribute to an efficient healthcare system, making good care accessible to everyone, everywhere, always.

This strategic exit represents yet another successful exit for Main in one of its core product-markets and marks Main’s largest exit in its history.

• Largest exit for Main Capital Partners
• Excellent return for LP’s of Main funds and management
• Very strategic acquisition for Legrand (care)
• Complex international deal setting
• Although a more tough deal climate in H2, parties were able to close this transaction

Deal rationale
The Buyer LeGrand historically has manifested itself as hardware provider, across various industries. Over the last years, they have seen the importance of software in their core customer segments, and one of them is healthcare. The acquisition of Enovation significantly accelerated their software strategy and became market leader in software solutions for the healthcare sector, not only in the Netherlands but also in core regions such as the UK, Germany and the Nordics.

What is the impact of this deal for the company?
As the buyer has a vast network of healthcare customers globally with their hardware offering, the company gains access to a wide network of potential customers significantly accelerating the internationalization strategy of Enovation.

Stronger combined product offering due to enhanced integration of LeGrand’s hardware offering coupled with Enovation’s software suite.

Excellent combined product offering for healthcare customers in Netherlands and other countries.

What is the impact of this deal for the direct stakeholders?
Back in 2018, Enovation was by far the biggest acquisition of a Main Capital Partners managed fund at that point (Main V). A single-asset co-investment vehicle was required to finance the acquisition, and later another fund rolled over into Enovation. Hence, three funds managed by MCP BV were in the captable.

On this investment, the Main funds returned a money multiple between 5-6x in in c. 5 years, with an exit EV over EUR 500m (mentioned by FD).

Enovation was the largest standalone deal for Main back in 2018, and also resulted in the largest exit to date with an exit EV of over EUR 500m (mentioned by FD).

Management made a transformative investment in the MBO investing alongside Main, returning c. EUR 45m in total for c. 20 managers.

Jeroen van Rijswijk, CEO of Enovation, comments on the combination with Legrand: “During our successful partnership with Main over the past six years, Enovation was able to substantially improve its international profile and market position. Main moreover helped us to create further value in healthcare by enhancing the care experiences of patients across the European healthcare industry. This new chapter marks a wonderful next step for Enovation and we are excited to join Legrand and serve our clients even better, as we now have access to a lot of new expertise as well as great international execution power.”

Benoît Coquart, Legrand’s Chief Executive Officer, adds: “We are very pleased to announce this investment in areas that are at the heart of buoyant trends and as such, of our growth acceleration strategy. We are also excited to work with the teams of these industry-leading companies.”

Sjoerd Aarts, Partner & Head of Benelux at Main Capital, concludes: “We supported in expanding Enovation’s product proposition and increasing its international footprint across North-Western Europe, transforming Enovation’s profile into a market-leading software player in healthcare. This successful partnership within one of our core product-markets once more underlines the added value of our highly specialized investment strategy, and culminated in a milestone exit for Main. We congratulate Enovation on this new chapter, joining Legrand.”

What is the impact of this deal on society?
Enovation’s offerings include software for remote monitoring of elderly and dependent persons using connected objects, the sharing of health information and data, and coordinating care between facilities, providers, and professionals. Its mission is to contribute to a sustainable healthcare system, making good care accessible to everyone, everywhere, at all times.

Not only in the Netherlands, but across Europe, countries are facing a challenging healthcare system. Trends such as the ageing population and rising costs, have increasingly put pressure on the sector. Enovation’s mission is to help healthcare institutions working more effectively at lower costs. With LeGrand as a parent, Enovation gains access to a significantly higher R&D budget to further innovate and significantly increased its potential reach due to its existing network.

What was most complex about this deal?
Enovation was a strong buy-and-build play, having completed 8 add-on acquisitions in 5 years’ time. Significant effort had been put in place to fully integrate the companies into one company, and rebranding the positioning of its offering from a product suite of separate products to a platform with various features.  The buyer significantly acknowledged the fact that Enovation is one company, operating internationally.

Buyer is a large French listed player with substiantially lower EBITDA multiples for itself than it paid for Enovation, which made the dealmaking process more complex.

For Legrand, being primarily a global hardware player, software was a bit of exotic. Nonetheless, parties were able to convince Legrand that for them also software is the future.