TPG-backed Fandom acquires again; Bernhard’s Spender shares electric utility insights; Hg’s Toms talks tech

TPG-backed Fandom acquires GameSpot, Metacritic and other entertainment and gaming brands.

Good morning, dealmakers. MK Flynn here with today’s Wire.

After reading a lot of depressing news about the economy over the weekend, I’m happy to begin today’s Wire with a fun deal. Also today, we’re featuring interviews with Bernhard Capital Partners in the US and Hg in Europe.

One-stop shop. Fandom, which calls itself the world’s largest fan platform, today announced it has acquired a portfolio of entertainment and gaming brands that includes GameSpot, Metacritic, TV Guide, GameFAQs, Giant Bomb, Cord Cutters News and Comic Vine from Red Ventures.

“We’re thrilled to add these powerful, authoritative brands into the Fandom platform, which will expand our business capabilities and provide immersive content for our partners, advertisers and fans,” said Perkins Miller, CEO of Fandom, in a statement. “The trusted insights, ratings and content they provide will make us a one-stop shop for fans across their entertainment and gaming journey. In addition to creating exceptional fan experiences, these platforms will add to our FanDNA data offering, giving us sentiment and intent signals that will help improve the consumer experience as well as make our commerce and advertising businesses more impactful.”

The price tag was not disclosed, but the Wall Street Journal pegs it at $55 million, citing people familiar with the matter.

Backed by TPG, Fandom has made several acquisitions in recent years. In 2021, Fandom acquired Fanatical, an ecommerce video game retailer, which diversified its revenue into commerce and strengthened the company’s footprint in gaming, according to the company. In 2019, Fandom bought Curse Media, which brought together gaming wikis with integrated digital gaming tools. And in 2018, Fandom acquired ScreenJunkies to bolster its entertainment and news coverage.

Power up. Growing demand to upgrade and maintain the obsolete grid in the US presents investing opportunities for private equity firms working in the utilities sector, Mark Spender, partner, Bernhard Capital Partners, told PE Hub’s Obey Martin Manayiti.

Last month, Bernhard portfolio company United Utility Services of Baton Rouge, Louisiana-based agreed to acquire BHI Power Delivery, a Weymouth, Massachusetts utility transmission and distribution services provider servicing Florida, Texas, Alabama, New York and Oklahoma.

“We saw the shift in investment by the electric utilities,” Spender said. “Historically they have invested heavily in power generation, but over the past five years, that has shifted considerably. Today, the vast majority of new investment by these utilities goes into the transmission and distribution infrastructure.”

UUS has been acquisitive. In January, the company acquired B&B Electrical & Utility Contractors, a Mississippi-based company focusing on new construction, renovation and service upgrades for commercial and industrial facilities in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Tennessee and Texas.

And last year, UUS scooped up Williams Electric Company, a Shelby, North Carolina-based company, which operates in North Carolina, South Carolina, Virginia and Georgia.

While there are a couple of large, national competitors that provide these services, for the most part, Spender said the industry is very fragmented.
“We wanted to consolidate several of those smaller businesses to build one of the leading providers of transmission and distribution services. This allows us to take the efficiencies of a larger organization, such as being able to offer a more complete suite of services or improved safety standards,” he said.

Spender continued: “Over the past several years, we were first focused on assembling the right pieces of the puzzle. A variety of services, the right companies in specific regions and most importantly, the right people. We believe we have accomplished that. So today, that focus is shifting to cross-selling services, to improving profitability and to gaining market share by becoming the preferred transmission and distribution services provider to our utility customers.”

For more, read the whole story.

Tech talk. With technology stocks taking a hit in public markets, scrutiny of private investments in the sector is rising. PE Hub Europe’s Craig McGlashan spoke with David Toms, head of research at Hg, for his view.
Hg is headquartered in London with offices in Munich, New York, Paris and San Francisco. It focuses on software and tech-services investments and looks for SaaS companies and firms that provide critical services.

In March, Hg announced it had bought software developers IFS of Linköping, Sweden and WorkWave of Holmdel, New Jersey, from EQT and TA Associates in a deal that valued the companies at $10 billion. And in July, Hg announced the acquisition of Ideagen, a specialist in compliance software for regulated industries, Nottinghamshire, UK.

Here’s an excerpt from the interview with Toms:

Given the backdrop of rising rates and inflation, are there some subsectors of technology that you see as likely to perform better than others? Which subsectors are less likely to perform well?

Software that automates business processes continues to be a key focus for us, due to its high degree of inflation protection. Many of our companies provide software that frees up human labor for higher value-add (and more interesting and stimulating) activities. In an environment of rising labor costs and falling labor availability, anything that helps drive labor productivity is well-positioned for continued strong performance. Consumer-focused tech is clearly facing a more challenging time, as are companies with low or negative margins, where input cost inflation has a much greater impact on earnings.

Is cross-border consolidation in the European tech market achievable or do regulatory and cultural differences make it too difficult? Is this subsector specific?

This is very subsector specific, and it is worth noting that cross-border M&A is not the same as cross-border consolidation. Some of our businesses (eg, Visma) are very active in cross-border M&A, as they see opportunities to repeat a successful playbook in a less mature market, share learnings and improve products for their underlying customers. This does not necessarily involve consolidating the businesses but may mean leaving them to function largely independently but providing some shared resource and experience. The move to cloud delivery of software aids this by enabling a greater degree of resource-sharing particularly in R&D, operations and delivery infrastructure.

You can read the whole interview here.

Don’t miss out. US private equity firms are expected to take advantage of the strong dollar to hunt for affordable targets in Europe.

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Each morning, Dealflow provides insights and analysis on private equity-backed deals in Europe and showcases the stories written by the PE Hub Europe team, led by editor Craig McGlashan and including reporter Nina Lindholm and assistant reporter David Wansboro.

Last week, the team covered the healthcare-focused HPE Europe conference in London.

One of the most interesting panels of the day was the spotlight on women’s health and fertility, Nina reported.

Women’s health is an area of growth for PE firms, according to Michelle Tempest, partner, Candesic. “Women will be the biggest spenders in the sector and on the high street,” she said, referring to what we in the US call “Main Street.”

The panel also featured Olympic champion and three-times world champion heptathlete Dame Jessica Ennis-Hill.

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As always, you can reach out to me at mk.flynn@peimedia.com.

I’ll be back with more tomorrow.

Happy dealmaking until then,

MK