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Booming Space Industry Begins to Tempt PE Firms | CI Capital Backs Renewable-Energy Consultancy
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Good morning, and welcome to the WSJ Pro Private Equity daily newsletter. This morning I have a story analyzing private equity’s small, but quickly growing presence in the space industry. While space startups have been mostly the territory of venture-capital firms so far, the number of mature, buyout-ready companies is growing, and private-equity firms are taking notice. The industry’s investment in U.S. space companies has exploded this year, from virtually zero in the past few years to about $1.2 billion so far in 2021.
Next, Luis Garcia brings news of a deal related to another booming sector, renewable energy. CI Capital Partners is buying Cadmus Group LLC, a consultancy that works with companies and government on issues related to the shift from carbon-intensive energy to more sustainable sources.
Now on to today’s news ...
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Amazon.com founder Jeff Bezos emerges from the Blue Origin capsule that took him into space in July. PHOTO: HANDOUT / AGENCE FRANCE-PRESSE / GETTY IMAGES
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The red-hot space industry is attracting record amounts of money from private equity, WSJ Pro Private Equity’s Chris Cumming reports. After recording less than $100 million in investment in the sector from 2018 through 2020, private-equity investment in U.S. space companies has exploded this year to about $1.22 billion, according to PitchBook data. While commercial launches by the likes of SpaceX and Blue Horizon have attracted the most attention, private-equity firms have made their biggest investments in areas like satellites and space-infrastructure, and see a possible boon in the U.S. military’s greater spending in the sector.
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Private-equity firm CI Capital Partners has acquired a majority stake in Cadmus Group LLC, a consulting firm that helps governments shift to renewable energy and cope with issues related to climate change, Luis Garcia reports for WSJ Pro Private Equity. Waltham, Mass.-based Cadmus provides consulting services to governments as well as utilities and other businesses. The company is expected to generate more than $100 million in revenue during the 12 months through next April, said Ian Kline, president and chief executive.
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The number of special-purpose acquisition companies backed by private equity or venture capital firms out of the 493 SPAC IPOs this year through Aug. 23, nearly twice the number -- 44 -- in all of last year, according to S&P Global Market Intelligence.
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Brooks Automation makes robotic systems that help keep clean rooms like this one in Minnesota free of airborne contaminants that could compromise the microcircuitry being etched into silicon wafers. PHOTO: KIMM ANDERSON / ASSOCIATED PRESS
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Thomas H. Lee Partners has agreed to buy the Semiconductor Solutions Group of computer chip industry equipment maker Brooks Automation Inc. in a deal valued at about $3 billion. The Chelmsford, Mass.-based business, which helps chip makers automate certain environmental and manufacturing processes, had sales of about $613 million in the 12 months through June, according to a news release. The group will retain the Brooks Automation name, while the seller’s remaining assets, which are life sciences-focused, will take a new name.
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Advent International has agreed to acquire a majority interest in consumer appliance maker Eureka Forbes Ltd. from Shapoorji Pallonji Group in a deal that gives the business an enterprise value of about 44 billion rupees, equivalent to about $597 million, according to a news release. Eureka Forbes makes items such as vacuum cleaners and water purifiers.
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Brookfield Asset Management Inc. is offering to take private Australian power distributor AusNet Services Ltd. in a deal that values the company’s equity at about 9.58 billion Australian dollars, equivalent to roughly $6.96 billion, an increase from two previous proposals, David Winning reports for Dow Jones Newswires. The Toronto-based assets manager previously proposed buyouts at A$2.35 a share, on Aug. 30, and A$2.45 a share, while the latest offer is for A$2.50 per share. The company’s shares closed Friday at A$1.98 each. Brookfield will be permitted to carry out due diligence on an exclusive basis to determine if it can make a binding offer, AusNet said.
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Bregal Partners, the midmarket investment arm of Bregal Investments, has made a growth investment in Oggi Foods Inc, a Montreal-based manufacturer of gluten-free, organic, non-GMO frozen pizza and other food products sold in grocery stores and other retail outlets across North America, according to an emailed press release.
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Caisse de dépôt et placement du Québec is acquiring a significant stake in investor communications and consulting company ICR LLC, joining Investcorp in backing the Norwalk, Conn.-based business. Investcorp initially invested in ICR in 2018.
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Elysian Capital has acquired D3O Lab from fellow investment firms Beringea US & UK and Entrepreneurs Fund, who had owned the company for some six years. D30 produces impact protection technology used in helmet liner systems, body armour for motorcyclists, hand protection for industrial workers and even prospective cases for smart phones. Elysian is investing out of Elysian Capital III LP, which closed in September 2020 at £325million, or around $446.5 million.
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Searchlight Capital Partners and the British Columbia Investment Management Corp. have agreed to back billboard operator Adams Outdoor Advertising. The Lansing, Mich.-based company operates in Illinois, Michigan, North and South Carolina, Pennsylvania, Virginia and Wisconsin.
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BlackRock Inc. has acquired fire safety company SFP Holding Inc. from CI Capital Partners, which acquired the business about four years ago. BlackRock bought the Mendota Heights, Minn.-based company, which operates as Summit Cos., through its long-term private capital strategy. Summit management is also investing in the business.
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Tritium Partners is backing media monitoring and analytics software company PublicRelay Inc., making a “significant investment” in the Tysons Corner, Va.-based business. The company’s products and services are used to monitor online and other media for reputation management, marketing and public relations strategies, according to a news release.
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Caisse de dépôt et placement du Québec is investing in Australian road infrastructure through the WestConnex project, joining a group called Sydney Transport Partners and led by Transurban. The group has agreed to acquire the remaining 49% of the project from the New South Wales government for about 11.1 billion Australian dollars, equivalent to roughly $8.05 billion. Through its investment, the Quebec pension manager will hold a 10% stake. The project includes about 33 kilometers of roadway being built or improved and 37 km of existing assets in the Sydney area.
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American Securities is acquiring the renewable energy unit of construction and engineering company Swinerton Inc. in San Francisco. The unit is a major installer of solar power systems and will be set up to operate as SOLV Energy LLC.
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StepStone Group Inc. has acquired fund manager investor Greenspring Associates, which also operates as a venture capital firm and growth-equity investor. The deal adds about $24 billion of assets under management to StepStone’s total, bringing the New York firm’s AUM to $109 billion and its assets under advisement to $375 billion, both as of the end of June.
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Sievi Capital PLC has acquired Finnish construction management company Rakennuttajatoimisto HTJ from Kansallisholding Oy and Redeve Oy, according to a news release. The Vantaa, Finland-based company earned about €1.4 million, equivalent to about $1.64 million, before interest and taxes on about €9.6 million in revenue for the first half of this year.
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New York-based midmarket firm Beekman Group Partners has invested in Allergy & ENT Management Holdings LLC to create a management services organization to support Allergy & ENT Associates, a network of medical clinics in Houston.
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RLJ Equity Partners has purchased cosmetology and esthetics training provider Ogle School in Dallas, with backing from Greyrock Capital Group. Greyrock also backed NCK Capital’s acquisition of the for-profit company with nine campuses in 2015.
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Weinberg Capital Group has acquired hunting gear maker Drake Waterfowl Systems in Olive Branch, Miss. Drake’s products are sold through national retail chains as well as on the company’s website.
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Our add-on deal interactive tool allows you to sort and analyze volumes of add-on deal data compiled by WSJ Pro. View more.
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Shares of online learning services provider Nerdy Inc. begin trading Tuesday under the NRDY ticker following its combination with a blank-check company backed by TPG Pace Group, the permanent capital arm of TPG. TPG Pace initially announced the deal in January, after raising $450 million through an initial public offering last October. The transaction gave Nerdy an equity value of about $1.7 billion.
Transfix Inc. plans to go public through a merger with a special-purpose acquisition company, G Squared Ascend I Inc., valuing the digital freight startup at $1.1 billion, the latest deal shaking up the middleman freight brokerage business. G Squared Ascend I is sponsored by affiliates of G Squared Equity Management, a growth and venture-capital fund that previously invested in Transfix.
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Toast Inc., backed by TCV, the former Technology Crossover Ventures, and Bessemer Venture Partners, has raised the expected price range for its initial public offering to $34 to $36 a share, from $30 to $33, Michael Dabaie reports for Dow Jones Newswires. Founded in 2011, Boston-based Toast makes restaurant point-of-sale and wireless ordering systems designed around mobile devices and has been growing rapidly since around 2015, regulatory filings show. Bessemer holds a roughly 12.5% stake in Toast, while TCV has about 5.5% of the shares, the filings show.
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Advent International-backed payments company Xplor Technologies LLC has confidentially filed a draft registration statement with the U.S. Securities and Exchange Commission for a proposed initial public offering, Colin Kellaher reports for Dow Jones Newswires. Advent formed Atlanta-based Xplor in February by combining portfolio companies Clearent and Transaction Services Group.
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Accel-backed Freshworks Inc. raised the anticipated price range for its initial public offering to $32 to $34 a share from $28 to $32 per share, in a regulatory filing Monday. The increased range would make the company worth as much as $9 billion should the shares price at the top of the range. Accel owns almost 26% of the San Mateo, Calif.-based software-as-a-service company focused on customer and employee experiences, while Tiger Global Management holds 26% of the equity in Freshworks, which has roots in Chennai, India.
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Vista Equity Partners-backed investment-management software company Allvue Systems Holdings Inc. in Coral Gables, Fla. plans to sell 15.3 million class A shares in an initial public offering for $17 to $19 each, potentially raising $334.3 million at the top end of that range, Robb M. Stewart reports for Dow Jones Newswires. Vista, which doesn’t plan to sell any of its shares, will control about 66% of the voting rights in the company following the IPO, according to a regulatory filing. The company would be worth as much as $1.62 billion at the top end of the range, Tomi Kilgore reports for sister publication MarketWatch.
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Advent International-backed hair care-products company Olaplex Holdings Inc. expects to see its initial public offering price at $14 to $16 per share, potentially raising as much as $1.23 billion, Robb M. Stewart reports for Dow Jones Newswires. Olaplex recorded net income of $39.3 million on sales of $282.3 million last year, and income of $94.9 million on $270.2 million in revenue for the first half of this year, a regulatory filing shows. Advent, which plans to sell about 62.5 million of its shares in the IPO, would still own about 78% of the company following the offering.
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GreyLion Capital has agreed to sell canine guard and investigations company MSA Security Inc. to strategic buyer Allied Universal, which is backed by Warburg Pincus and MKH Capital. New York-based MSA has nearly 700 canine explosive detection teams in operation worldwide and generates almost $200 million in annual revenue. The company also provides threat monitoring, special investigations and armed security operatives.
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Sun Capital Partners said it has exited its investment in Arrow Tru-Line Holding LLC, a provider of garage door components that the private equity firm acquired back in 2017.
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New York-based investment firm Turning Rock Partners said it realized its subordinated loan investment in Richmond, Va.-based Capital Square, a real estate investment firm.
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Audax Private Equity has acquired a majority stake in GCX Mounting Solutions, a Petaluma, Calif.-based company that designs and manufactures mobility and mounting equipment used in medical device original equipment manufacturers and hospitals, according to a press release.
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Advent International- and Carlyle Group Inc.-backed H.C. Starck Group GmbH has agreed to sell its electronic-materials business to strategic buyer Materion Corp. for about $380 million, Colin Kellaher reports for Dow Jones Newswires. The unit based in Newton, Mass. is expected to generate about $145 million in revenue this year. Carlyle and Boston-based Advent acquired Starck from Bayer Group in February 2007 for about €1.2 billion, or about $1.41 billion, with the Washington-based private equity firm
investing through its Carlyle Europe Partners II fund.
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Z Capital Partners has sold metal processing services company Premier Thermal Solutions LLC to strategic acquirer Aalberts NV. Z Capital acquired the Lansing, Mich.-based business as a corporate carve-out in 2017.
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Levine Leichtman Capital Partners has wrapped up its LLCP Lower Middle Market Fund III LP with about $1.38 billion of commitments. The firm plans to invest the new vehicle mainly in U.S. companies with less than $50 million in revenue and usually led by entrepreneurs. The new fund is more than twice the size of its predecessor, which the Beverly Hills, Calif.-based firm closed in 2016 with about $615 million.
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Liberty Strategic Capital, the firm started by former Treasury Secretary Steve Mnuchin, has reportedly raised $2.5 billion for its debut fund. The Washington-based firm in May reported having zero assets under management. In July, the firm reported having yet to land the first sale for its Liberty 77 Fund International LP. On Monday, Bloomberg News reported that Liberty Strategic has raised $2.5 billion, much of it from sovereign wealth funds in the Middle East.
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Newly established private-equity firm Jeito Capital has wrapped up its first investment fund, Jeito I, with €534 million of commitments, the equivalent of around $626.2 million, nearly 7% above its €500 million target, the Paris-based firm said. Jeito was set up in January 2020 and focuses on biotechnology and pharmaceuticals. Jeito said fund investors included the Teacher Retirement System of Texas and Singapore’s Temasek Holdings.
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Software-focused Vista Equity Partners has added three senior professionals to its operational leadership and value creation teams. Craig Hayman has joined as an operating advisor to the firm’s flagship private-equity team, while Angela Pecoraro has joined as an operating managing director at the firm to help integrate environmental, social and governance best practices across its private equity funds and portfolio companies. Finally, Dirk Wakeham has joined as operating managing director for Vista’s Foundation fund team, which focuses on midmarket deals. Mr. Hayman was most recently chief executive of software company AVEVA Group Plc,
while Ms. Pecoraro held roles at at least two Vista portfolio companies including most recently Advicent, where she was chief executive. Mr. Wakeham was CEO of property management software company Zego Inc, a Vista portfolio company acquired by Global Payments Inc. earlier the year.
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Ara Partners has hired David Lynch as a principal. He joins from Alinda Capital Partners, where he was a director. Also, Ara has hired Sarah Kent and Rob Tripp as operating partners. Ms. Kent was previously the chief executive of Kentec and Mr. Tripp previously started and ran Benefuel Inc.
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CRUX Asset Management has hired Damian Taylor as deputy lead for the firm’s two new Asia equity strategies, based in Edinburgh, Scotland, according to an emailed news release. Mr. Taylor was most recently portfolio manager for Martin Currie’s flagship Asia Long-Term Unconstrained strategy.
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Xi Jinping’s campaign in China against private enterprise, it is increasingly clear, is far more ambitious than meets the eye, Lingling Wei writes for The Wall Street Journal. The Chinese president is not just trying to rein in a few big tech and other companies and show who is boss in China. He is trying to roll back China’s decadeslong evolution toward Western-style capitalism and put the country on a different path entirely, a close examination of Mr. Xi’s writings and his discussions with party officials, and interviews with people involved in policy making, show.
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Services provider Apex Group Ltd. in Bermuda has established a carbon footprint and reporting service to help private-equity firms and companies they own determine their emissions impacts. The service is also designed to outline commercial risks from operations based on their emissions levels.
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Britain’s Labor Party is promising to eliminate a tax loophole that lets private-equity fund managers pay a lower rate on some of their earnings if it wins the next national election, the BBC reports. Labor leaders say they would treat carried interest earnings, currently taxed as capital gains, as ordinary income to increase tax revenue from around 2,000 individuals by about £440 million, or about $604.4 million, annually.
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EQT AB has weathered the worst of the coronavirus pandemic and is back at full speed, doing deals and raising capital at an accelerated pace, Lina Saigol reports in sister publication Private Equity News in London.“Right now, every market is active, interest rates are low, liquidity is high and there is a real drive for yield,” said Christian Sinding, the Stockholm-based firm’s chief executive. “These kinds of market conditions won’t last forever and we want to act while they last.”
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