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Private Equity Spurs U.K. Buyout Rush | Leeds Nears $1.25 Billion Close | Slate Banks First Credit Fund
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Good Monday to all. Wall Street left doubters in the dust by setting new records Friday, with all three major equities indexes reaching new highs. The Dow Industrials closed above 35000 for the first time, so you could say we're officially back to the days when the future looked so bright you had to wear shades, to paraphrase a famous lyric.
It definitely seems that way in the world of private equity, as a look through our recent coverage will show. In today's news, the Journal's Ben Dummett chronicles a rush of take-private deals in Britain, where assets can look cheap. Closer to home, our Preeti Singh reports that Leeds Equity Partners is on the verge of closing it seventh buyout fund with $1.25 billion. Meanwhile our Maria Armental writes that real-estate specialist Slate has wrapped up its first credit fund with about $600 million. We have those stories and many more collected below, so please wade in...
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U.K. grocery retailer Morrisons has been the subject of several takeover offers. PHOTO: CHRIS RATCLIFFE / BLOOMBERG NEWS
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Blackstone Group Inc., Carlyle Group Inc. and other buyout firms are bidding for U.K. publicly listed companies at a faster rate than they have in years. The reason: Post-Brexit Britain is one of the few markets where investors think big assets are going for cheap, Ben Dummett writes for The Wall Street Journal. Buyout firms have struck 13 take-private deals in Britain so far this year valued at almost $31 billion, acquiring businesses in sectors including healthcare, supermarkets and property development, according to Dealogic. That is the highest number for the comparable period since 2007 and more than double the six deals done in all of 2020. By comparison, the U.S. has recorded 20
such deals since January, compared with 21 in all of last year.
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Leeds Equity Partners has nearly completed raising commitments for its seventh buyout fund and expects to wrap it up by Saturday with $1.25 billion, Preeti Singh reports for WSJ Pro Private Equity, citing Connecticut pension documents. The Connecticut Retirement Plans and Trust Funds is considering adding $50 million to a previous $75 million commitment to the vehicle, Leeds Equity Partners VII LP, that it made last year, Mark Evans, principal investment officer, told the state Investment Advisory Council in a recent meeting. Mr. Evans manages the private-equity and private-credit investments for the $43.99 billion public pension system.
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Real-estate-focused Slate Asset Management, which is backed by Goldman Sachs Group Inc.’s Petershill arm, has raised nearly $600 million for its first private-credit fund, Maria Armental reports for WSJ Pro Private Equity. The Toronto-based firm invests in real estate through private-equity funds as well as publicly traded real-estate investment trusts, according to its website. Slate plans to use the capital to invest in debt, including bridge and transitional loans, and is backing its previously announced $2.33 billion acquisition of Annaly Capital Management’s commercial property business through the new fund.
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45%
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The proportion of family office assets invested in alternatives, including 24% devoted to private equity and 4% for credit strategies, according to a Goldman Sachs Group Inc. survey of more than 150 family offices world-wide
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Apollo aims for the home building business by acquiring New Home Co. PHOTO: MARK LIPCZYNSKI FOR THE WALL STREET JOURNAL
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Apollo Global Management Inc. is offering $9 per share to take private residential builder New Home Co. in a deal that gives the company an equity value of $173 million, Dave Sebastian reports for Dow Jones Newswires. The offer price represents an 85% premium over Scottsdale, Ariz.-based New Home's closing price Thursday.
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Advent International-backed U.K. aerospace company Cobham Ltd. is offering £2.58 billion, or about $3.55 billion, to acquire defense-equipment supplier Ultra Electronics Holdings PLC at £35 per share, a 42% premium to the company’s closing share price of £24.70 on Thursday, Ian Walker reports for Dow Jones Newswires. The target company said Cobham initially offered £28 per share on June 29. Ultra said it would begin talks with Cobham to explore the latest proposal in greater detail. Ultra shares jumped to £32.70 on Friday.
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Partners Group Holding AG has agreed to acquire a group of Travelodge hotels in Australia with a gross asset value of about 620 million Australian dollars, or roughly $457.6 million, from Mirvac and NRMA. The Swiss private-equity firm is investing in the group alongside Singapore’s GIC Pvt. Ltd. and Salter Brothers, a regional hotel operator. The business has locations in major Australian cities, including Sydney, Melbourne and Brisbane and more than 2,000 rooms in all.
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Shareholders of Proofpoint Inc. have voted in favor of Thoma Bravo’s $176 a share take-private offer that values the company at about $12.3 billion. The Sunnyvale, Calif.-based cybersecurity business said the deal is on track to close by the end of September.
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H.I.G. Capital’s Whitehorse credit unit is committing €110 million, or about $129.5 million, to refinance hospital operator Grupo Hospitalario Recoletas. The family owned Valladolid, Spain-based company has eight hospitals in Spain with about 540 beds and 13 medical centers.
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Hellman & Friedman has wrapped up its take-private transaction to acquire interior decor retailer At Home Group Inc. in an all-cash deal that valued the business at about $2.8 billion, including debt. The Plano, Texas-based company operates 230 stores across 40 states.
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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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A Momentus rendering showing how its technology can send small satellites into orbit. PHOTO: MOMENTUS
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Momentus Inc., a space-transportation company that plans to go public through a blank-check company, shows how investors can face risks in deals involving special purpose acquisition companies, Dave Michaels reports for The Wall Street Journal. Momentus and the SPAC that plans to acquire it, Stable Road Acquisition Corp., didn’t tell potential investors that its satellite-hauling technology failed, that it lost contact with a satellite in space and that its Russian founder had been deemed a U.S. national-security risk, the Securities and Exchange Commission has said. “Those who stand to earn significant profits from a SPAC merger may conduct inadequate due diligence and mislead investors,”
SEC Chairman Gary Gensler said when he announced an enforcement action earlier this month that included $7 million in penalties.
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Vista Equity Partners-backed virtual-event technology company Cvent Inc. has agreed to combine with a blank-check company backed by Dragoneer Investment Group in a deal that values the business at about $5.3 billion, Michael Dabaie reports for Dow Jones Newswires. Vista plans to roll its entire stake in Tysons, Va.-based Cvent into the new publicly traded company that will result from the deal with Dragoneer Growth Opportunities Corp. II.
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A blank-check company formed by Pacific Century Group and Thiel Capital has agreed to combine with digital property marketplace group PropertyGuru. The deal with Bridgetown 2 Holdings Ltd. gives PropertyGuru an equity value of about $1.78 billion, Stephen Nakrosis reports for Dow Jones Newswires.
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Clayton, Dubilier & Rice-backed fire-protection products distributor Core & Main Inc.’s initial public offering priced at the low end of its expected range of $20 and $23 a share then jumped more than 18% to close at $23.70 on Friday, Robb M. Stewart reports for Dow Jones Newswires. The St. Louis-based company, which also handles water, wastewater and storm-drainage products, was acquired by CD&R in 2017 and planned to retain about 80% of its equity stake following the IPO. Core & Main had sales of about $3.64 billion in its last fiscal year.
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Baupost Group-backed Outbrain Inc.’s shares priced at $20 each in the company's initial public offering, below the expected $24 to $26 price range, and closed unchanged Friday. The offering valued the New York-based company at about $1.07 billion, Ciara Linnane reports for Dow Jones Newswires. Baupost recently invested $200 million in the web advertising platform whose other backers include Lightspeed Venture Partners, Viola Ventures and Gemini Israel Ventures, a regulatory filing shows.
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Apax Partners has closed its 10th midmarket fund at €1.6 billion, or roughly $1.88 billion, surpassing a €1.2 billion target for the vehicle, Mark Latham reports for sister publication Private Equity News in London. The fund, Apax Midmarket X, is around 60% larger than the firm’s ninth midmarket pool, which it wrapped up in 2016 with about €1.03 billion.
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Baird Capital has closed its Global Fund II with more than $340 million, according to an emailed news release. The firm’s first global fund wrapped up in 2017 with $310 million. Baird Capital, the private-equity investment arm of Robert W. Baird & Co. in Milwaukee, backs technology companies with adjusted pretax earnings of $5 million to $15 million, writing checks of $15 million to $40 million.
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Star Mountain Capital has raised $225 million from banks to provide additional capital to its strategic Credit Income Fund 3 strategy, which raised $610 million last year. The added credit is expected to increase the fund’s leverage in backing mid-size businesses.
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Tom Barrack speaks with reporters at Trump Tower in New York in January 2017. PHOTO: STEPHANIE KEITH / REUTERS
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A blank-check company led by Colony Capital Inc. founder Thomas Barrack, who is facing federal criminal charges alleging he acted as a foreign agent and lied to law enforcement investigators, has withdrawn its registration for an initial public offering of shares. Falcon Acquisition Corp., the special purpose acquisition company, is led by Mr. Barrack and backed by his family office, Falcon Peak Partners. It filed to raise $250 million through an IPO in March. Mr. Barrack, a longtime ally of
former President Donald Trump, is due to appear in U.S. District Court in Brooklyn, N.Y., on Monday for arraignment. He is charged with working as an agent for the United Arab Emirates. A representative for Mr. Barrack has said he isn’t guilty.
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Companies on the brink of insolvency are increasingly appointing independent directors to their boards as they prepare for a bankruptcy filing, but their neutrality is disputed by creditors, lawyers and academics, Soma Biswas and Alexander Gladstone report for WSJ Pro Bankruptcy. The companies label these directors as disinterested experts who act to maximize value for creditors. But some of these directors are biased in favor of the companies that hired them, new research suggests.
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Wall Street firms are more eager than ever to buy family homes. If they snap up existing supply rather than help build new dwellings, they risk killing their latest golden goose, Carol Ryan writes for The Wall Street Journal’s Heard on the Street. Last week, Blackstone Group Inc. bought a portfolio of apartments for $5.1 billion from insurer American International Group Inc. In June, Blackstone spent $6 billion on Home Partners of America, a company that owns more than 17,000 houses across the U.S. and offers renters an option to buy. But so far, institutional investors have bought just one in 500 U.S. homes sold in the 12 months after the Covid-19 crisis began, according to Amherst Capital.
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Carlyle Group Inc. aims to raise as much as $27 billion for its next private-equity fund, which could make it the largest such investment vehicle ever raised, according to Bloomberg News. The news service said Carlyle is discussing the size of the new fund with investors, citing people familiar with the matter.
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U.S. stocks rallied Friday, pushing the Dow Jones Industrial Average across the 35000 closing milestone for the first time, in a striking rebound from major indexes’ pullback earlier this week, Caitlin McCabe and Joe Wallace report for The Wall Street Journal. All three major U.S. stock indexes finished Friday at all-time highs after each posted weekly gains of more than 1%.
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