Private equity group Permira’s new bosses

One thing to start: Hedge fund Segantii Capital Management bet against Canada Goose after speaking to a Morgan Stanley banker whose desk knew of an impending share sale that threatened to hit the clothing brand’s stock price.

In today’s newsletter:

• Permira’s succession planning

• Golden Goose gears up to float

• It’s time to BeReal

Permira kicks off succession plan

During the 2008 financial crisis, London-based Permira was one of the most notable private equity groups to have its deals sour as large markdowns raised questions about the future of a European buyouts leader that neared US rivals such as Blackstone in its might.

It faced large losses in ProSiebenSat.1, a German television group that was one of many leveraged buyouts struck at the apex of a mid-2000s buyout boom, which foundered in the 2008 financial crisis.

While some high-flying firms of that era including Fortress and Guy Hands’ Terra Firma all but exited the buyout industry in the wake of high-profile investment duds, Permira took on fresh blood inside its ranks and charted a turnaround.

In 2008, Permira managing partner Damon Buffini, a politically connected dealmaker who was seen by many as the face of European private equity, handed over day-to-day leadership to co-managing partners Kurt Björklund and Tom Lister.

Fresh investment blood also entered its ranks — including the hiring of dealmakers Brian Ruder in the US and Dipan Patel in London.

From the nadir of the crisis, Permira has charted a turnaround under the leadership of Björklund and Lister, who retired in 2021 and ceded full leadership to his partner.

Now Permira is undergoing another succession.

On Wednesday, it named Ruder and Patel as co-chief executives who will take the reins of a group known for its technology and consumer-related bets in September.

They will inherit a firm undergoing a growth revival. After raising a €10bn flagship fund in 2006, Permira’s poor performance caused a successor fund raised in 2014 to be just half that size.

But more recent fundraisings have been hits. In 2023, it closed a €16.7bn flagship buyout fund that exceeded its €15bn target.

Permira’s assets are about €80bn and it has become a large lender to private companies across Europe, diversifying its investment operations.

While fortunes have recovered for Permira, the fund’s new leaders will contend with a challenging market backdrop, similar to the test faced by their predecessors.

Some of its current deals such as large takeovers of Zendesk and Genesys face the disruption of the AI revolution, while mega deals such as the takeover of software group McAfee were completed just before interest rates began to soar.

Permira also listed footwear brand Dr Martens in 2021, but a collapse in its share price after the listing has eaten into a large windfall.

It’s a similar situation to its investment in Adevinta until the Norwegian classifieds group was reprivatised by Permira last year at a premium price with the help of Blackstone and other equity backers.

The group has maintained an aggressive investment outlook, recently striking a deal to take US website specialist Squarespace private for $6.9bn, one of 10 large investments made by its most recent fund.

Golden Goose charges ahead with €2bn plans to float

While we’re on the topic of Permira, why not dig into their soon-to-be-public luxury sneaker brand Golden Goose.

We had heard rumours that the company struggled to convince investors the valuation they were targeting last year — about €3bn — was right. Permira’s since lowered that target, and is now aiming for an IPO at an enterprise value of roughly €2bn.

Although the firm told us the listing didn’t happen in April because of tough macroeconomic conditions, many investors and analysts read it as a pricing issue. But first-quarter results were good, and the firm’s ploughing ahead.

Golden Goose’s chief executive Silvio Campara has been very clear from the start: the firm wants long-term investors that are committed to the company’s growth. He didn’t think the debut price would mean much in the grand scheme.

Case in point: Invesco. The firm committing €100mn is an example of the sorts of investors the company’s looking to bring on board.

While Golden Goose now specialises in distressed-looking sneakers, the ultimate goal is to expand into clothing and accessories. But the company’s path forward is strewn with potential obstacles, according to Lex, including fickle consumers and the risk of becoming a one-trick pony.

But even as a shoe-brand, there could be some hope. Other successful companies only focus on footwear, such as Christian Louboutin and Sergio Rossi.

The issue, then, isn’t solely about being focused on just one product, but instead being able to evolve style and design.

Certainly, not all of them have thrived. Tod’s is one case of a brand falling short, as it’s struggled with declining sales for years.

In February, the brand officially unveiled plans to go private in a deal with LVMH-backed private equity firm L Catterton after more than two decades as a public company.

Permira’s gone down a similar path before, though — and not with a ton of success. Three years ago, it floated classic British boot brand Dr Martens in London but the investor reception has been weak.

But Golden Goose has made a name for itself with shoes that can be worn to the office by bankers and also Taylor Swift. Is that a sign the company’s float will be different, or has it reached peak relevance?

The real price to buy social media app BeReal

“It’s Time to BeReal” is the iconic tagline for the French social media start-up BeReal.

But it seems like that doesn’t apply as strictly when it comes to the company’s M&A messaging.

Founded in 2019, BeReal prompted users once a day to snap and post a candid photo of themselves, rocketing to viral status and Saturday Night Live-level fame in the process.

However, while the company raised roughly $90mn, growth had levelled off at about 50mn monthly active users since the end of 2022.

That led BeReal on Tuesday to announce it had been taken over by France’s privately held video game and app developer Voodoo.

While the deal came with an official value of €500mn, DD understands that may not exactly be a reflection of the immediate payday due for the company’s investors.

The deal is structured with just about one-third of the money upfront, with the rest coming in the form of future payments depending on meeting milestones after the acquisition is completed, meaning the figure shareholders will see is closer to roughly €167mn.

(A Voodoo representative said they could only confirm the deal was a mix of upfront and future payments without providing specifics).

For BeReal’s venture capitalist backers, which include the likes of Andreessen Horowitz and Accel, they won’t necessarily lose money on this takeover. But they also won’t realise much in the way of profits unless Voodoo’s shares gain significant value.

The M&A deal comes at a time when the attention of VCs is shifting to artificial intelligence start-ups. The same day as the BeReal-Voodoo tie-up, France’s hot AI company Mistral raised €600mn in funding at a nearly €6bn valuation.

For BeReal and its investors, it was time to sell and BeHonest.

Job moves

• Carlyle has promoted Sandra Horbach to chair of Americas corporate private equity and Steve Wise to co-head of Americas corporate private equity. Wise is currently the global head of healthcare.

• EY’s UK boss Hywel Ball plans to step down. He’s led the UK unit of the accountancy firm since 2020, and his departure kicks off a leadership race as the Big Four firms grapple with a market slowdown.

• Heka Advisors and Vestra Advisors are engaging in a strategic partnership to work together on cross-border transactions in the buildings and materials sector.

Smart reads

Paramount fiasco The bidding saga that has ensnared media giant Paramount in recent months can be blamed on its dual-class shares, Lex writes.

Musk’s romances At SpaceX, Elon Musk has a history of boundary-blurring relationships with women, including having sex with an employee and a former intern, the WSJ reports.

Nuclear hype The surge in demand for uranium shows how the world is once again embracing nuclear power — after years of neglect, Bloomberg reveals.

News round-up

Terraform Labs to pay $4.5bn in SEC fraud cause (FT)

McKinsey boss’s next big consulting project: his own firm (WSJ)

Mexican billionaire Carlos Slim takes 3% stake in telecoms group BT (FT)

Sony buys Alamo Drafthouse movie-theatre chain (WSJ)

Oil tanker group Frontline unlikely to return to Red Sea ‘anytime soon’ (FT)

Argentina loses appeal over $1.5bn payment to hedge funds (FT)