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More PE Firms Weigh Climate Risk | Carlyle Broadens Infrastructure Approach | Buyouts Are Booming
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Good day, Pro Private Equity readers! Stocks fell on Friday over concerns about a new variant of the coronavirus spreading in South Africa. We will all be watching as members of the World Health Organization—which on Friday declared the strain a “variant of concern”—meet to try to determine how much of a threat it poses. Stay tuned.
Meanwhile, in this morning’s newsletter, Laura Cooper looks at the growing integration of climate change risk into private-equity due-diligence processes, even in industries that aren’t seen as heavy polluters. Also in today’s newsletter, our own Luis Garcia looks at the attraction that Carlyle Group’s Macky Tall, who chairs the firm’s infrastructure group, sees in backing mature assets. And our Journal colleague Miriam Gottfried writes about this year's flood of private equity-backed deals.
Read on for more on these and other stories ...
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Img caption/IMG CREDIT HERE
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More private-equity firms, large and small, are adding environmental, social and governance factors, particularly around climate risk, into deal-making and due-diligence processes, Laura Cooper reports for WSJ Pro Private Equity. Although a number of larger firms have been doing this for a while, midmarket and smaller firms are also getting on board. Climate risk is also factoring in deals across areas that were not traditionally viewed as large sources of pollution, or are vulnerable to environmental forces.
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Carlyle Group Inc. is looking to expand its investments in infrastructure assets that it can hold on to for many years—airport terminals, water-treatment systems, renewable power plants, for instance—while booking steady payouts, WSJ Pro Private Equity’s Luis Garcia writes. Macky Tall, who joined Carlyle earlier this year to chair the firm’s infrastructure group, discussed the appeal of such assets and how the firm is responding to the ever evolving opportunities in infrastructure.
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Big leveraged buyouts are back, and this year’s crop might just be a taste of things to come, Miriam Gottfried writes in The Wall Street Journal. Private-equity firms have announced a record $944.4 billion worth of buyouts in the U.S. so far this year, 2.5 times the volume in the same period last year and more than double that of the previous peak in 2007, according to Dealogic. Driving many of the deals are the billions of dollars flowing into private-equity coffers as institutions such as pension funds seek higher returns in an era of low interest rates.
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58%
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The proportion of holiday shoppers who expect to spend more or about the same this year compared with last year, up from 46% who said that last year, a Goldman Sachs Group Inc. survey shows
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The deal to buy Quest comes a month after it bought identity access-management business OneLogin for an undisclosed price. PHOTO: ONELOGIN INC.
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Clearlake Capital Group has struck a deal to buy Quest Software Inc. from Francisco Partners in the latest sign of private-equity firms’ voracious appetite for software, Miriam Gottfried reports in The Wall Street Journal. The deal, expected to be announced as soon as Monday, values Quest at $5.4 billion including debt, according to people familiar with the matter. It is the latest big buyout in software, whose steady cash flow has become a major draw for private-equity firms, as they set their sights on bigger and bigger deals. Earlier this month, Advent International Corp. and Permira Advisers signed a roughly $12 billion deal for
cybersecurity-software firm McAfee Corp.
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KKR & Co. is making another bet in Southeast Asia with an agreement with Malaysian private education company Taylor’s Education Group to acquire a minority stake in Taylor’s Schools, which owns and operates six international schools in the region. They include Nexus International School Singapore, Nexus International School Malaysia, Australian International School Malaysia and Taylor’s International School Puchong, among others.
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Cabot Corp. said it would sell its Purification Solutions business to One Equity Partners, a middle market private-equity firm, in a deal valued at $111 million, Dow Jones Newswires Michael Dabaie reports. Purification Solutions engages in research, development, manufacturing and sale of high-performing activated carbon used environmental, health, safety and industrial applications.
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TA Associates is taking a majority stake in Nactarome S.p.A., a Milan, Italy, based company that manufactures natural flavors, colors, functional ingredients and clean labels. The company’s management team and its current investor Ambienta each will retain a minority stake, according to a press release.
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Ethos Private Equity and African Rainbow Capital are leading a group that is acquiring South African financial technology company Crossfin Technology Holdings Pty. Ltd. for 1.5 billion rand, or roughly $94.7 million, according to a news release. The deal for the Cape Town-based payments and funding company provides an exit for founding backers Capital Eye Investments and Multiply Group.
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Baymark Partners has acquired Bogey Free LLC, which does business as Rackmount Solutions, according to a release issued by mergers and acquisition advisor Generational Equity, which advised Rackmount on the deal. Plano, Texas-based Rackmount offers equipment used to house computer systems and other network peripherals as well as installation and servicing of such equipment.
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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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Growth investor Ahren Innovation Capital is backing a blank-check company that aims to raise $250 million through an initial public offering of shares in New York, Josh Beckerman reports for Dow Jones Newswires. The SPAC’s leaders include Alice Newcombe-Ellis, the founding and general partner of Ahren Innovation Capital, and Elliot Richmond, a former partner and managing director with New York investment bank Moelis & Co., a regulatory filing shows. The SPAC plans to acquire and take public a “deep technology” or “deep science” company with “transformational breakthrough” potential.
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Technology investment firm Hambro Perks Ltd. is backing a special-purpose acquisition company that plans to raise up to £150 million, or roughly $200.6 million, through an initial public offering of shares in London, a regulatory filing shows. Hambro Perks Acquisition Co. is led by Dominic Perks, a Hambro Perks co-founder and the growth investor’s chief executive, and Anthony Salz, the firm’s chairman. The SPAC plans to focus its hunt on “proven tech winners” in the U.K. or Europe for a buyout target to take public, the filing indicates.
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A blank-check company backed by Investcorp Holdings has registered to raise $250 million through an initial public offering of shares in New York, a regulatory filing shows. Investcorp Europe Acquisition Corp I’s leaders include Chairman Hazem Ben-Gacem, Investcorp’s co-chief executive, Chief Investment Officer Alptekin Diler and Chief Financial Officer Craig Sinfield-Hain, who are both Investcorp executives, the filing shows. The SPAC aims to acquire and take public a business in the services, consumer, technology or manufacturing sector in Western Europe or Turkey.
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Nexa Equity, a midmarket firm founded by Vlad Besprozvany and other professionals who had previously worked in different capacities with Insight Partners, is seeking $250 million for Nexa Equity Fund I LP and related parallel funds, regulatory filings indicate. Nexa targets investments in software and financial technology companies. In August, it made a majority growth investment in AutoReturn, a provider of software used in towing and parking enforcement.
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European alternative asset manager Golding Capital Partners said it has hired Christian Schütz as the firm’s new director of environmental, social and governance to implement sustainability goals both within the firm and across its portfolio. Mr. Schütz most recently served as senior vice president of credit market research at Pacific Investment Management Co. (PIMCO), where he was also a member of the global asset manager’s sustainability initiative, according to a press release.
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Activist investor Ancora Holdings Inc. is pushing Berry Global Group Inc., a packaging manufacturer with a roughly $9 billion market value, to explore a sale, Cara Lombardo reports for The Wall Street Journal. Ancora, which owns about 1% of Evansville, Ind.-based Berry Global, is urging it to explore strategic alternatives including a possible sale and make other changes, according to a copy of a letter the activist sent to the company's board Sunday that was viewed by the Journal.
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London wants to regain the mantle of the world’s busiest financial center from New York by overhauling how banks and other financial firms are regulated after Brexit, Simon Clark reports for The Wall Street Journal. The U.K. government said this month its top financial regulators will be required to help boost growth and international competitiveness in the financial sector, as secondary mandates to existing tasks such as maintaining financial stability and consumer protection.
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High-yield bond sales hit a record this year as investors hunt for higher fixed-income returns, Sebastian Pellejero writes for the Journal. U.S. companies, including medical supplier Medline Industries LP and videogame maker Roblox Corp., have sold more than $455 billion of bonds with speculative-grade credit ratings this year through Monday, according to S&P Global Market Intelligence’s LCD. That already beats the full-year total for 2020, when junk-bond sales set a then-record of $435 billion.
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Two billionaires—one Democratic, one Republican—are facing off over the response to rising violence in Chicago and their broader running feud is raising the prospect of a new national spending record in a governor’s race, John McCormick reports for The Wall Street Journal. Illinois Gov. J.B. Pritzker, whose self-financing for his first campaign in 2018 helped set the current U.S. record, has found himself at odds with his state’s richest man. Citadel hedge fund founder Kenneth Griffin, a major donor to philanthropic causes and mostly GOP candidates, has said he would financially support a Republican seeking to defeat Mr. Pritzker next year in a state where Democrats now
hold all statewide elected offices.
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Ray Dalio’s Bridgewater Associates has raised the equivalent of $1.25 billion for its third investment fund in China, Jing Yang, Juliet Chung and Rebecca Feng report for The Wall Street Journal, citing a person familiar with the matter. The amount catapults the roughly $150 billion hedge-fund firm into the ranks of the biggest foreign managers of private funds in the world’s second-largest economy. Bridgewater’s assets under management in China ranged between 2 billion yuan and 5 billion yuan ($313 million to $782 million) as of early August, according to the Asset Management Association of China, a quasiofficial organization.
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Ontario Municipal Employees’ Retirement System is joining the growing ranks of institutional investors that are pledging to achieve what they term net-zero emissions by 2050. The pension system, which managed $114 billion in net assets as of June 30, has already promised to reduce carbon-intensity across its portfolio by 20% by 2025, according to a press release.
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Gardner Capital is partnering with nonprofit microlender Kiva Microfunds to provide seed capital loans to minority-led small businesses in Texas. The firm, which backs affordable housing, renewable energy and tax-credit syndicates, is partnering with San Francisco-based Kiva through its GCRE Upward Mobility Fund to match loans financed through Kiva’s crowd-funding website.
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