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An Oil-Field Services Shift | PE-Backed CraftWorks Preps Restructuring
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Happy Friday! Here in Massachusetts, it's the last day of school vacation week, which some of us are more excited about than others. As you read this, I will be enjoying a day off at one of Boston's many art museums with my 14-year old, a feat that involved more negotiation than a key-man provision.
In this morning's news, meanwhile, Luis Garcia has a new twist on the ever evolving impact of a volatile oil-and-gas market on private-equity investments in the sector. This time, Luis looks at how certain backers of oil-field services companies are looking more closely at less traditional companies.
Read on for this and other news...
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Workers repair a damaged section of oil pipeline in Arkansas. Private-equity firms that have been investors in companies providing services to oil producers are increasingly refocusing on businesses that help downstream companies maintain pipelines and refineries. PHOTO: DANNY JOHNSTON/ASSPCIATED PRESS
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Private-equity firms that back oil-field services providers are casting a wider net over the types of companies they back as lower oil prices and environmental concerns put pressure on oil-and-gas companies, Luis Garcia writes for WSJ Pro. One such firm, Hastings Equity Partners, is looking more to industrial services companies both within the downstream oil sector and outside it.
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CraftWorks Holdings Inc., a Centerbridge Partners-backed owner of a collection of brewery and casual dining brands including pizza chain Old Chicago Restaurants and steakhouse Logan’s Roadhouse, is preparing a debt restructuring in the face of tough competition in the sector, WSJ Pro Bankruptcy reports, citing people familiar with the matter.
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The percentage-point difference in performance between private-equity firms with value-creation teams versus those without them, between 2009 and 2013, according to research from McKinsey & Co. Firms with value-creation teams had average net internal rate of returns of 23%, versus 18% for those without.
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Hellman & Friedman paid about $11 billion last year to take Ultimate Software private. PHOTO: SAUL MARTINEZ/BLOOMBERG NEWS
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Hellman & Friedman-backed workplace-software providers Ultimate Software Group Inc. and Kronos Inc. plan to merge, The Wall Street Journal’s Cara Lombardo and Miriam Gottfried report, citing people familiar with the matter. The all-stock deal would create a company worth roughly $22 billion, including debt, the people said. Hellman & Friedman would remain the controlling shareholder, while Blackstone Group Inc., which also owns stakes in both, would be the largest minority investor in the combined company.
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Insight Partners led a $200 million Series E investment round in Sentinel Labs Inc., which does business as SentinelOne, the Mountain View, Calif.-based cybersecurity company said. Other investors included Vista Equity Partners, through its Vista Public Strategies arm, Tiger Global Management and venture funds as well as previous investors. The funding pushed the company’s value past the $1 billion “unicorn” level to $1.1 billion.
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General Atlantic led a $110 million investment round in online education provider Sorting Hat Technologies Pvt Ltd., which does business as Unacademy in India, company co-founder and chief executive Gaurav Manjal said on Twitter. Other investors in the round included Facebook Inc. and Sequoia, he said.
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Great Hill Partners has completed a recapitalization of One Inc., a Folsom, Calif.-based digital-payments platform provider for the insurance industry, in partnership with the company’s management team. As part of the deal, Matt Vettel, a managing partner at Boston-based Great Hill, and Nick Cayer, a partner at the firm, will join the One Inc. board.
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Thompson Street Capital Partners in St. Louis has acquired Len the Plumber Inc. alongside management of the Baltimore-based company, which provides residential plumbing services in the Baltimore-Washington region.
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Sky Island Capital has taken a majority stake in Polished Metals Ltd., investing alongside the founding Lazarus family, according to the Dallas-based private-equity firm. The Hillsdale, N.J.-based company provides architectural and ornamental metals used in buildings and transportation, among other markets.
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Battery Ventures has made a significant investment in Tech Soft 3D, which offers software tools for companies that produce software for manufacturing and architecture, engineering and construction.
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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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FFL Partners has sold Icynene-Lapolla, a manufacturer of spray polyurethane foam insulation, to Huntsman Corp. for $350 million. The private-equity firm acquired the company back in 2014 when it was known as Icynene Group Ltd.
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Chernin Group-backed Barstool Sports Inc. has sold a 36% stake in itself to casino operator Penn National Gaming Inc. for about $135 million in cash and $28 million in preferred stock in a deal that makes Penn National the online media company’s exclusive gaming partner. The agreement also lets Penn National increase its stake in the Milton, Mass.-based company to 50% within three years for an additional $62 million.
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Russia-focused Elbrus Capital has sold its majority interest in document storage and management company OSG Records Management (Europe) Ltd. to strategic buyer Iron Mountain Inc. for 6 billion rubles ($93.5 million), or more than 4.5 times the amount originally invested in the company. Elbrus acquired its interest in the Russia-based company in 2013 and entered a joint venture with Iron Mountain with the Boston-based company acquiring a 25% stake in its Russian counterpart in 2017. Iron Mountain said it bought the rest of the company in early January.
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BlueKey Wealth Advisors, a wealth-management firm based in Hollywood, Fla., said it has formed a small to midmarket private-equity unit called BlueKey Equity Partners. The new firm focuses on private lending, core real estate and business investments.
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Cubera Private Equity has closed on €524 million ($565.3 million) for Cubera IX LP, a secondary fund focused on Nordic private equity. The fund closed at its hard cap and was mostly backed by investors in Oslo-based Cubera’s previous funds. The fund is 29% bigger than its predecessor and is the first raised by Cubera since Stockholm-based Storebrand Asset Management acquired the firm last year.
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Financial-services specialist Aquiline Capital Partners in New York has named retired insurance executive Kevin H. Kelley as an executive adviser. Mr. Kelley in 2019 he stepped down as Liberty Mutual Insurance Co.’s vice chairman for global risk solutions.
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Sterling Group, a Houston-based midmarket buyout firm, said it has hired Erin Arnold as a director at the firm and Chris Ahearn as commercial operating partner. Ms. Arnold joins the firm from Madison Dearborn Partners, where she was a director, although she previously worked at Sterling in 2013 to 2014. Mr. Ahearn brings a long history of operations experience with organizations that include RR Donnelly’s Western Division and TPG Capital’s operating group. Separately, Sterling also promoted Steven Hirsch and John Griffin to principal roles.
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Rockwood Capital, a real-estate investment specialist in New York, has made a series of promotions. Beau Baiocchi, Richard Kramer and Matthew Friedman have been moved up to managing director from director, the firm said. Marti Breier was named general counsel from associate general counsel, investments and Jaclyn Chou was elevated to executive director, financial operations from director.
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ICompany founder Les Wexner will keep a seat on L Brands’ board. PHOTO: ADAM CAIRNS/TNS/ZUMA PRESS
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With an agreement to sell a majority stake in L Brands Inc., Les Wexner is giving up control of a company he ran for more than five decades, Khadeeja Safdar reports for The Wall Street Journal. Mr. Wexner brought fashion to the masses through mall stores across America, but the 82-year-old billionaire’s decision to part ways with Victoria’s Secret is an admission that he couldn’t revive the troubled lingerie brand he had built on shopping centers and sex appeal.
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A provision that loosens restrictions on a private-equity-owned company’s ability to remedy an event of default is raising concerns among many in the private debt market, Reuters Loan Pricing Corp. reported. Known as an auto-cure, the feature has started appearing in some of the large unitranche loans. It is an addition to documentation highlighting the continued weakening of lenders’ protections. Auto-cures let private-equity sponsors put more capital into a company in the event of a default outside the traditional default cure period. The feature buys borrowers time to assess the reaction of a lender in a default situation, whether they pursue a foreclosure or amendment, and then make the cure, effectively pushing the
default further down the road.
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Send us your tips, suggestions and feedback. Write to:
Ted Bunker, Laura Cooper, Chris Cumming, Luis Garcia, Laura Kreutzer, William Louch, Preeti Singh, Chitra Vemuri.
Follow us on Twitter: @wsjpe, @LCooperReports, @LHVGarcia, @LauraKreutzer, @william_louch.
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