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Paul Volcker Dies at 92 | Kohlberg & Co. Seeks $3 Billion | SoftBank Sells Wag | McAfee Eyes NortonLifeLock Deal
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Good day. This past weekend, two legendary figures in the world of finance died. Each affected the private-equity industry in different ways. Paul Volcker, the former Federal Reserve chairman who passed away at 92 on Sunday, was perhaps best known in the private-equity world for the rule named after him that limited a bank’s proprietary trading activity and its ability to own or invest in private-equity funds. The Volcker rule, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, drove a string of spin-outs of private-equity firms from banks. Closer to home, the industry lost Donald Marron, who founded financial services-focused Lightyear Capital after a lengthy career at Paine Webber. Mr. Marron died on Friday at 85 years old of an apparent heart attack. May they both rest in
peace.
On a lighter note, in today's news Chris Cumming reports on Kolhberg & Co.’s latest fundraising effort and Cara Lombardo has news that SoftBank’s Vision Fund has sold its stake in dog-walking startup Wag Labs back to the company. Last but not least, Cara, joined by Corrie Driebusch and Miriam Gottfried, report that personal computer security software leaders McAfee, backed by Thoma Bravo and TPG, and publicly traded NortonLifeLock may be considering a combination.
Read on for more details of the day's news...
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Former Fed Reserve Chairman Paul Volcker Dies at 92
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Former Federal Reserve Chairman Paul Volcker died Sunday at age 92. PHOTO: WIN MCNAMEE FOR GETTY IMAGES
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Paul Volcker, who defeated runaway inflation as Federal Reserve chairman in the 1980s, establishing the importance to the economy of an independent central bank, and whose “Volcker Rule” became a controversial element of postcrisis banking regulation in the Obama administration, has died at 92 years old, according to the Wall Street Journal. Mr. Volcker died Sunday at his home in New York following a long illness, his family said.
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Kohlberg Targets $3 Billion for Latest Fund
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Kohlberg & Co. is seeking to raise the largest buyout fund in its 32-year history, WSJ Pro's Chris Cumming writes, citing a public pension document. The vehicle, Kohlberg Investors IX LP, has a target of $3 billion, according to a document from the Teachers’ Retirement System of Louisiana. The firm’s eighth fund closed with $2.2 billion in late 2016.
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SoftBank Is Selling Wag Stake Back to Company
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SoftBank Group Corp.’s Vision Fund has agreed to sell its nearly 50% stake in Wag Labs Inc. back to the struggling dog-walking startup, according to people familiar with the matter, marking another disappointment for the Japanese investing giant. Wag, which earlier this year laid off several dozen employees, is letting go a significant amount of the remainder of its workforce today, according to one of the people and an internal memo viewed by The Wall Street Journal.
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McAfee Considering a Combination With NortonLifeLock
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Software company McAfee LLC, whose backers include private-equity firms TPG and Thoma Bravo, may be interested in combining its consumer business with NortonLifeLock Inc., the $16 billion consumer-software company, The Wall Street Journal reported, citing people familiar with the matter. NortonLifeLock, the new name for Symantec Corp., has attracted deal interest from a handful of companies, the people said. Earlier, the Journal reported that Permira and Advent International were potential suitors for the Mountain View, Calif.-based provider of computer security systems.
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96%
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The proportion of Japan-based limited partners who plan to invest in private equity in the 12 months through the first quarter of 2020, according to Preqin Ltd. interviews.
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OrbiMed Scores on Sanofi's $2.5 Billion Synthorx Acquisition
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Sanofi's acquisition of Synthorx is expected to close in the first quarter next year. PHOTO: BENOIT TESSIER/REUTERS
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OrbiMed-backed Synthorx Inc., a biotechnology company focused on cancer, has agreed to be acquired by drug giant Sanofi SA for $2.5 billion as it bids to catch up to rivals developing immunotherapies, The Wall Street Journal reported Monday. Immunotherapies are drugs that help the immune system fight tumors. OrbiMed Healthcare Fund Management, through its OrbiMed Private Investments VII LP fund, owned 21.5% of La Jolla, Calif.-based Sythorx before its initial public offering about a year ago, a regulatory
filing shows. Its stake was expected to drop to 14.4% after the IPO, the filing shows. RA Capital Management’s RA Capital Healthcare Fund LP held 28.2% of Synthorx before the IPO and planned to retain 18.8% after the deal. But at the end of March 2019, another Synthorx regulatory filing shows RA Capital funds held 30.3% of its shares outstanding and OrbiMed had 16.5%.
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Veronis Suhler Stevenson has invested in Endo1 Partners, a dental services organization that provides back-office support and resources to endodontists. The deal is valued at between $20 million and $30 million, according to a person familiar with the situation. Endo1 is expected to expand through M&A of complementary endodontic practices. It was formed in 2019 and currently has operations in Texas and California.
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Thomas H. Lee Partners has agreed to sell its private-credit affiliate, THL Credit Advisors LLC, to midmarket direct lender First Eagle Investment Management in New York. With the addition of the Boston-based unit, which has about $16.8 billion in assets under management, First Eagle will represent roughly $23 billion in assets under management and advisement. First Eagle’s combined operations, which include tradable credit, had about $99 billion in assets at the end of September.
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General Atlantic-backed XP Inc., a Brazilian securities broker and financial-services company, plans to sell as much as $2.08 billion in shares through an initial public offering in New York, selling about 42.6 million of its own shares for $22 to $25 each, regulatory filings show. Other selling shareholders, including General Atlantic, may sell more than 40.8 million additional shares in the deal. São Paulo-based XP reported adjusted net income of $158 million for the nine months through Sept. 30, and adjusted earnings before interest, taxes, depreciation and amortization of $244 million for the period on gross revenue of $887 million. General Atlantic invested in the company in 2013
and holds a roughly 25.9% stake. After selling nearly 9.4 million common shares in the offering, the firm will retain 18.6% of the company’s common stock.
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Investment advisory firm ArrowMark Partners has agreed to acquire the platform and assets of StoneCastle Asset Management LLC, the external investment adviser to and manager of StoneCastle Financial Corp. As part of the agreement, the combined unit, called StoneCastle-ArrowMark Asset Management LLC, would become StoneCastle Financial’s external investment adviser. The transaction also calls for ArrowMark Partner Sanjai Bhonsle, who leads the firm’s $4.8 billion corporate credit and lending business, to become chairman and chief executive of StoneCastle Financial, replacing Joshua Siegel, who would remain as a member of the
company’s board of managers. The transaction is subject to StoneCastle Financial shareholder approval.
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Miami-based midmarket firm White Wolf Capital said it has recapitalized Temporary Housing Directory Inc., which provides short-term housing and relocation services. White Wolf typically backs companies with $10 million to $100 million in revenue and up to $10 million of earnings before tax, interest, depreciation and amortization.
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Private-equity firm Harvest Partners has acquired Lazer Spot Inc. from Greenbriar Equity Group. The Alpharetta, Ga.-based logistics company provides outsourced shipping container management services in freight and rail yards as well as manufacturing sites and ports.
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Tress Capital has made a strategic investment in iCAN, an Israeli cannabis incubator. Tress is a private-equity firm dedicated to cannabis. Its previous investments have mainly been in North American cannabis companies.
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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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Leonard Green & Partners, Florida Growth Fund LLC and the two co-founders of AerSale Corp., a provider of aviation aftermarket products and services, have agreed to sell the Coral Gables, Fla.-based company to blank-check enterprise Monocle Acquisition Corp. in a transaction with an implied enterprise value of about $430 million, Dow Jones Newswires reported. Monocle said it will pay $250 million in cash and $150 million in newly issued common equity to AerSale's owners, who will retain a combined interest of about 42% in the publicly traded company. AerSale expects to generate roughly $310 million in revenue and a 17.6% adjusted Ebitda margin this year, Monocle said.
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NorthEdge Capital has sold Direct Healthcare Group to France’s ArchiMed in a deal that tripled the value of its initial management buyout in 2016 and provided a 39% internal rate of return, the U.K.-based private-equity firm said Monday. The company’s earnings and employment both more than tripled during NorthEdge’s ownership, the firm said. Direct Healthcare specializes in the development of pressure-care technologies.
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Parthenon Capital raised more than $2 billion for its Parthenon Investors VI, closing it well above its initial $1.5 billion target, the San Francisco-based firm said Monday. Parthenon makes growth investments in midmarket companies with enterprise values of $35 million to $500 million in three core sectors: health-care, financial and business services. The firm had $3.47 billion in client assets under management at the end of last year, according to a regulatory filing in March.
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Centana Growth Partners, a growth-equity firm focused on financial services, fintech and enterprise technology companies, said it has closed its second fund with $375 million in limited-partner commitments. The final tally for Centana Growth Partners II LP exceeded the size of the firm's debut fund, which wrapped up in 2015 with $250 million.
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Spring Lane Capital has closed its debut private-equity fund at about $156.5 million. Backers of the new vehicle include BDC Capital, Fondaction, Fonds de solidarité FTQ and Palomino Capital Corp. The firm also said it has made three recent investments: Atlas Organics Inc., a commercial processor and composter; renewable energy company Aries Clean Energy; and Cambrian Innovation, a commercial provider of wastewater treatment services. Spring Lane focuses on providing finance and growth capital for sustainability projects in the energy, food, water and waste industries.
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Perceptive Advisors, an investment firm with a long history of funding publicly traded and later-stage privately held life sciences companies, is driving into early-stage venture capital by raising a $210 million biotechnology fund, WSJ Pro's Brian Gormley reports.
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Donald B. Marron, who headed the securities firm PaineWebber Group for two decades and became almost as well known for his art collection as for his Wall Street exploits, died Friday in New York. Mr. Marron, 85 years old, apparently had a heart attack while on the way to a holiday party, according to the Journal.
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The White House on Monday praised a congressional deal on legislation to protect consumers from surprise medical bills, raising the chances that the bipartisan bill could pass this year, The Wall Street Journal reported. The agreement from Democratic and Republican House and Senate health leaders ends a long stalemate over how to curb high hospital bills from out-of-network doctors and health providers. The deal would end the surprise bills and include a new system where independent arbitration would settle billing disputes.
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Technology specialist investment firm Thoma Bravo outperformed rival private-equity managers for the third year in a row in a survey by the HEC Business School in Paris. The analysis of firms in the U.S. and Europe by HEC professor Oliver Gottschalg ranked the Chicago-based firm as the top performer, according to sister publication Private Equity News. The study analyzed the performance of 497 private-equity firms and 891 buyout funds raised between 2006 and 2016, drawing on data provided by Preqin Ltd. and directly from firms. It calculates aggregate performance, taking into account different fund vintage years and considering both relative and absolute returns.
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Investment firm Tiger Global Management slashed its valuation of e-cigarette startup Juul Labs Inc. to $19 billion, a sign of a broader reassessment investors are making of several onetime Silicon Valley darlings, The Wall Street Journal reports.
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