Telecom traffic is soaring as consumers and businesses across the globe stream more audio and video and share data in real time. Increased use of AI applications is also demanding more from telecoms providers.

Private equity has been present in plenty of AI infra dealmaking, but it seems telecoms hasn’t been forgotten. On Friday, Waterland Private Equity joined the pursuit to take Gamma Communications, a London-listed telecoms provider, private. Waterland is the fourth PE firm to show interest in the company – we’ll delve into the process to kick off this morning.

We’ll finish with a revisit to last week’s UK take-private coverage.

More the merrier

As I write this, many commuters will be browsing short-form video content on their way to work or listening to podcasts or music via a streaming service. There is an expectation that even in the lowest depths of the London Underground, you should be able to connect to a data provider.

With an increased use of AI applications, businesses also demand more from their telecoms providers. One such provider has yet another suitor: Gamma Communications confirmed on Friday that Waterland Private Equity is among the firms in discussions to take the company private.

Giacom, a telecoms services business backed by Inflexion, is acting in concert with Waterland, whereby it would acquire certain business divisions of Gamma, according to a statement.

Waterland has until September 18 to make its intentions clear. The firm has some competition however, as Epiris remains in talks with Gamma with a deadline to put in a formal offer by September 2.

The number of suitors has diminished. In June, Oakley Capital and Providence Equity Partners withdrew from the potential bidding for Gamma.

We’ve been looking into the flurry of take-private deals involving UK targets lately. One of the reasons behind the boom is a persistent valuation discount: many UK-listed companies have traded at “sustained discount,” according to a note shared by Covington earlier this month. The law firm issued an alert examining the return of bear hugs in the market following the increased take-private activity.

ICYMI

UK take-private activity features in our coverage almost weekly. PE Hub’s Craig McGlashan delved into the reasons behind the flurry last week, following the progress in Ridgeview Partners’ take-private move for car dealership software provider Pinewood Technologies Group.

Craig wrote about several AI-related drivers for these deals. Among them, is the argument by sponsors that businesses seeking to roll out AI across their businesses can better do that in private, away from quarterly reporting and other demands of the public markets.

There could be more AI-driven take-privates to come, according to a note shared by Ken Barry, head of Europe private equity at global law firm White & Case, following the Pinewood agreement.

“The public market sell-off in the software sector earlier in the year following the release of new AI models was so indiscriminate that many strong businesses were caught up despite no clear evidence of systemic risk to their underlying business models. Now that the dust has settled, assessments have once again become much more differentiated and calibrated.

“While assessments of AI’s potential impact on a business may still feature on the first page of investment committee papers, private equity firms are once again on the hunt for strong businesses where AI can act as a catalyst for growth and value creation, rather than a source of disruption.”

Make sure to read Craig’s full analysis and recap of recent UK take-private activity.

That’s all from me. Rafael Canton will cover for MK Flynn on the US Wire later today, and Craig McGlashan is in the Europe chair tomorrow.

Cheers,

Nina

Source link