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Healthtech Firm MTIP Raises $250 Million | BlackRock in Saudi Pipeline Deal | Kohl’s Pressured to Divest
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Good day and welcome to the Private Equity Pro newsletter. Today we lead off with news at the intersection of perhaps the two hottest fundraising sectors for private equity, tech and healthcare. Basel, Switzerland-based MTIP AG, which backs companies at the intersection of the two sectors, specifically targeting medical-device businesses and those with a focus on sustainability, has collected $250 million for its second fund, Laura Cooper writes for WSJ Pro Private Equity. The sum marks a leap from the $65 million first vehicle, a 2016 venture intended as a “proof of concept” of the firm’s approach.
Next, WSJ’s Summer Said reports that BlackRock Inc. is taking a 49% stake in the natural-gas pipeline business of Saudi Aramco, as the state-owned energy company aims to monetize some of its oil assets. BlackRock is partnering with Hassana Investment Co. on the $15.5 billion transactions.
Finally, WSJ’s Cara Lombardo brings us news on the possibility of a new acquisition target for private-equity firms: the e-commerce business of Kohl’s Corp., which activist investor Engine Capital is urging the department-store chain to divest.
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Christoph Kausch is the managing partner of MTIP. Its second fund is nearly four times the size of the first. PHOTO: MTIP
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Swiss healthtech private-equity firm MTIP AG has collected $250 million for its second investment fund, with the goal of backing companies at the nexus of two expanding industry sectors, Laura Cooper writes for WSJ Pro Private Equity. The Basel firm had set a $225 million target for the vehicle, which raised nearly four times the amount brought in by its first fund—a “proof of concept” vehicle that collected $65 million in 2016, according to Christoph Kausch, managing partner of the firm. MTIP backs digital health and digitally-connected medical device companies.
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A group led by BlackRock Inc. and Saudi-backed Hassana Investment Co. has agreed to buy a 49% stake in Saudi Aramco’s natural-gas pipeline business for $15.5 billion, Summer Said reports for The Wall Street Journal. Officially called the Saudi Arabian Oil Co., Aramco said it formed a new unit that will lease usage rights to its gas pipeline operations and agreed to sell a 49% stake in that unit to BlackRock Real Assets and Hassana, asset-management arm of Saudi Arabia’s General Organization for Social Insurance. Aramco plans to lease back the usage rights, paying fees to the business.
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Activist investor Engine Capital is pressing retail chain Kohl’s Corp. to either sell itself or a carve out of its online business, citing poor investment returns since 2018, Cara Lombardo reports for The Wall Street Journal. Engine Capital said a private-equity buyer of the Menomonee Falls, Wis.-based company, which has a market capitalization of about $6.7 billion, would likely operate the department-store business “with significantly more leverage” than current management is willing to take on. Kohl’s said it continuously examines ways to maximize shareholder value and appreciates the dialog with investors.
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66%
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The percentage of investors that indicated a general partners’ financial commitment to a fund was an issue they focus on most when investing in a fund, according to a survey of 71 institutional investors and advisors conducted by placement firm Probitas Partners
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Call Center workers, including Loretha Cager, center, handle incoming calls at a St. Paul, Minn. call center in this 2014 file photo. PHOTO: ANN HEISENFELT / ASSOCIATED PRESS
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Permira-backed customer-experience company Genesys Telecommunications Laboratories Inc. said a group of firms invested $580 million in the company, giving a valuation of $21 billion, according to a news release. The investment round was led by Salesforce Ventures, joined by ServiceNow Ventures, Zoom Video Communications, BlackRock Inc. and D1 Capital Partners. Permira first invested in the Daly City, Calif.-based provider of call-center and customer-contact servies in 2012, joined by Technology Crossover Ventures, or TCV, in a corporate carve out valuing the business at about $1.5 billion.
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Providence Strategic Growth Capital Partners, or PSG, led a $64 million investment in Ironscales Ltd., a cybersecurity firm focused on email and preventing phishing attacks by hackers by applying artificial-intelligence technology, according to an emailed news release. PSG was joined by existing investors K1 Investment Management and Jump Capital in the series C investment round. The Atlanta-based company, founded in Tel Aviv, has more than 5,000 clients worldwide
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Energy-focused investor EnCap Flatrock Midstream is making an initial investment of $350 million in carbon capture and storage company Elysian Carbon Management LLC, according to a news release. The recently established business in San Antonio plans to work with power producers and other industrial businesses to build systems that grab carbon from emissions and other sources, such as pipelines, and send it to geologic storage vessels.
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Savant Growth led a $30 million investment in Redica Systems Inc., a cloud-based data intelligence business that works with companies in the life sciences and food industries, according to an emailed news release. The series B investment round’s participants also included existing investor Rock Creek Capital. Pleasanton, Calif.-based Redica is a data and software company that provides regulatory and quality information to clients in the pharmaceutical and medical-device industries, among others.
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Carlyle Group Inc. led a growth investment of as much as $475 million in data analytics company Yipit LLC, joining Norwest Venture Partners in backing the New York-based company. Norwest first backed the company in 2018.
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Madison Dearborn Partners in Chicago has agreed to acquire Zilliant Inc., an Austin, Texas-based software and services company that uses data to help businesses optimize the prices they charge and better manage and execute their sales processes.
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Berkshire Partners has invested in software-as-a-service company Tango Management Consulting Inc. The Dallas-based company’s software is used to manage commercial real estate. Boston-based Berkshire invested alongside company management and existing backer Frontier Growth, according to a news release.
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Growth investor JMI Equity led an $85 million investment in software-as-a-service provider ServiceTrade Inc., joined by existing investors Frontier Growth and Bull City Venture Partners, according to an emailed news release. The Durham, N.C.-based company offers tools to commercial services providers to manage their contracts and employees. ServiceTrade has more than 800 clients who work with over 12,000 technicians generating more than $3 billion in annual revenue.
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Audax Group’s private-equity arm is backing Veterinary Practice Partners LLC, making a growth investment in the acquirer of stakes in veterinary practices, clinics and hospitals based in King of Prussia, Pa. The business was previously backed by Pamlico Capital, which initially invested in 2016, according to Pamlico’s website.
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Ten Coves Capital led a $35 million investment in software-as-a-service provider Canopy Tax Inc., joined by existing investors NewView Capital, Pelion Partners, Tenaya Capital and Ankona Capital, according to an emailed news release. The Draper, Utah-based company provides practice-management applications to accounting and tax-services practices.
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American Industrial Partners is set to acquire the assets of Strike LLC through a court-surpervised acution, according to a news release. The Woodlands, Texas-based pipeline operator entered a chapter 11 bankruptcy reorganization to facilitate a purchase agreement with AIP, which is its largest creditor and serves as the stalking horse bidder for the assets. The transaction process is set up as a court-supervised auction, so AIP’s proposal could be trumped by a higher bid. In the meantime, AIP is providing $29 million in debtor-in-possession financing to the company.
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Savant Growth led a $30 million investment in FileCloud, the secure content collaboration platform operated by CodeLathe Technologies Inc., joined by Kennet Partners, according to an emailed news release. The Austin, Texas-based company has also arranged a $10 million growth capital facility from Avidbank Holdings Inc.’s lending unit. The new investment is earmarked to help support growth of the company.
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Financial-services investor Lightyear Capital has recapitalized PracticeTek, a company that invests in software businesses serving the payments needs of healthcare providers and related businesses. Lightyear joined family office Greater Sum Ventures in backing the company.
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Specialist investor DW Healthcare Partners has sold prosthetics maker WillowWood Global LLC to Blue Sea Capital. DW Healthcare initially backed the Mt. Sterling, Ohio-based business in June 2019.
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European investor Keensight Capital is backing online payments company Buckaroo BV, replacing Blackfin Capital as the majority investor in the Netherlands-based business, according to an emailed news release. Keensight is investing alongside company management. Blackfin first backed the business about four years ago.
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Credit-focused Mudrick Capital Management has arranged a $30 million debt financing deal for publicly traded Remark Holdings Inc. New York-based Mudrick had about $3.5 billion in assets under management as of October, compared with $2.86 billion at the end of December, and focuses on corporate finance deals.
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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 blank-check company deal that would have taken Silver Lake-backed Service Max Inc. public at a valuation of about $1.4 billion has been canceled, with both sides of the transaction citing unfavorable market conditions. Pathfinder Acquisition Corp., a special purpose acquisition company backed by HG and Industry Ventures, said it plans to pursue another deal before its dissolution deadline of Feb. 19, 2023.
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The Securities and Exchange Commission is probing two of the most notable SPAC deals struck this year, including former President Donald Trump’s venture, signaling that regulators are ratcheting up scrutiny of such deals and rushing to keep up with the frenzy of activity, Amrith Ramkumar reports for The Wall Street Journal. The SEC is investigating a potential merger between Trump Media & Technology Group and special-purpose acquisition company Digital World Acquisition Corp., according to a regulatory filing by the SPAC on Monday. Also Monday, electric-vehicle startup Lucid Motors Inc. said it got an SEC subpoena about projections and statements it
made as part of its recently completed SPAC deal, which valued Lucid at roughly $24 billion.
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Red Arts Capital, Prudential Capital Partners and Brightwood Capital Advisors have sold transportation logistics services company RAC MME Holdings LLC to strategic buyer Knight-Swift Transportation Holdings Inc. for $150 million in cash. Red Arts and the other firms acquired the Bismarck, N.D.-based business, which operates the Midwest Motor Express and Midnite Express trucking lines, in 2019. The company is expected to produce adjusted pre-tax earnings of $27 million on $137 million in revenue this year, according to the publicly traded buyer.
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Dominus Capital has agreed to sell its Masterbuilt and Kamado Joe outdoor charcoal grills to strategic buyer Middleby Corp. Dominus has backed Masterbuilt since at least September 2017.
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Asset manager PineBridge Investments has wrapped up its debut fund to back first-time private-equity managers with $334.3 million. The firm will use its PineBridge Preferred Participation Fund LP to back North American and Western European firms with experienced managers who are raising their first commingled funds. PineBridge aims to become an anchor investor for the new managers it backs and to support them as they scale their firms, the company said in an emailed statement.
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Crédit Agricole’s Amundi asset-management business has named Annie Chor Joyce as head of environmental, social and corporate governance for Amundi US. She joins the Paris firm’s U.S. operations from MSCI Inc., ESG Research, where she was a vice president and ESG consultant.
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New York City will require all private-sector workers be fully vaccinated against Covid-19, in what Mayor Bill de Blasio described as a “first in the nation measure,” as Chip Cutter and Jennifer Calfas write for the Journal. The new mandate will go into effect Dec. 27—days before a new mayor takes office and as a federal vaccine mandate for many private-sector employees remains entangled in a court battle.
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CVC Capital Partners is considering a market listing that could value the private-equity company at more than $15 billion, the U.K.’s Sunday Times reports. The London firm has $125 billion in assets under management and is understood to be working on the listing with Goldman Sachs Group Inc., Kyle Morris reports for Dow Jones Newswires, citing the Times.
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Congressional Democrats are debating whether increasing the $10,000 cap on the state and local tax deduction would benefit the rich too much, but some of America’s top earners—including private-equity managers and law-firm partners—are already legally circumventing the cap on much of their income, Richard Rubin writes in The Wall Street Journal. That is because state governments and the Trump administration blessed a cap workaround for owners of closely held businesses that is proliferating around the country. So far, about 20 states have enacted versions of it, including New York, California, Connecticut, New Jersey and Illinois.
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Nasdaq is poised to beat the New York Stock Exchange in initial public offerings this year, far outpacing its crosstown rival during a record year for capital raised in U.S. public markets, Alexander Osipovich reports for The Wall Street Journal. IPOs at Nasdaq raised $191 billion this year through Friday, compared with $109 billion for new NYSE listings, according to Dealogic. Nasdaq's commanding lead with only a few weeks left in 2021 means it is likely to beat the Big Board for the third year in a row.
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