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Insight Gets Into Preferred Equity | Inflexion Sets $2.74 Billion Goal | Silver Lake Backs G42 | SPAC-Target Company CFOs Face Hurdles
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Good morning. With so much buzz surrounding blank-check companies and a new administration getting its feet on the ground in Washington, it’s hardly surprising that the deluge of special-purpose acquisition company formations in the past several quarters would attract regulators’ attention. The Wall Street Journal’s Dave Michaels highlights questions that have been raised about accounting for warrants that often accompany shares of SPACs in their IPOs, while Mark Maurer offers a quick breakdown of issues target-company finance chiefs may face in getting ready for a deal.
Meanwhile in private equity, our Laura Cooper and Preeti Singh report that Insight Partners is broadening its strategy to invest in preferred equity and has collected $1.56 billion to back the effort through a new Opportunities fund. It marks the firm’s first step outside its growth-investing tradition. Also, Preeti has news that Inflexion Partners in London aims to raise £2 billion for its latest buyout fund. Finally, the Journal's Miriam Gottfried writes that Silver Lake is investing $800 million in an Abu Dhabi technology company known as G42. We have these stories and much more for you below, so please take a look...
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Insight Partners is based in the Grace Building, center, which sits opposite New York’s Bryant Park in Midtown Manhattan. PHOTO: RICHARD B. LEVINE / ZUMA PRESS
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Insight Partners has raised $1.56 billion for a new fund initially focused on structured preferred equity investments in technology companies, giving the fund’s limited partners an opportunity to collect fixed returns, Laura Cooper and Preeti Singh report for WSJ Pro Private Equity. Insight Partners Opportunities Fund I LP, the firm’s first fund outside of its flagship growth-investment vehicles, will provide alternative financing such as structured preferred equity investments, according to the firm.
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Inflexion Partners is pitching its latest buyout fund to investors with a £2 billion (equivalent to about $2.74 billion) target, Preeti Singh writes for WSJ Pro Private Equity, citing people familiar with the fundraising. Should Inflexion Buyout Fund VI LP reach the London firm’s goal, it would be 60% larger than a predecessor fund that closed in 2018 with £1.25 billion.
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Silver Lake is investing about $800 million for a minority stake in Abu Dhabi technology company Group 42, in a sign of the private-equity firm’s deepening relationship with the emirate, Miriam Gottfried reports in The Wall Street Journal, citing people familiar with the matter. G42, as the company is known, offers artificial-intelligence and cloud-computing products aimed at digitizing enterprises across Abu Dhabi’s economy, and increasingly in other parts of the Middle East.
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Finance executives at businesses merging with special-purpose acquisition companies face hurdles preparing for valuation work and setting up internal controls within a short space of time, as U.S. regulators ramp up their scrutiny of such deals, Mark Maurer writes for CFO Journal. Finance chiefs at target companies face a host of accounting challenges, the most important ones ranging from disclosure to internal controls and valuations.
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WSJ Pro is conducting our annual survey of secondary buyers. If you are a secondary investor and are interested in participating, you can access the online survey at the link below. As we have done in prior years, survey responses are aggregated and individual responses are kept anonymous. Don’t miss your chance to participate in one of the oldest secondary surveys in the industry. Responses are due by April 21.
You can find the survey link here.
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16x
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The median deal value multiple of earnings before interest, taxes, depreciation and amortization for technology companies last year, compared with a median 12.1 multiple for all buyouts by private-equity firms, according to a Ropes & Gray LLP report citing Mergermarket data
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Epic Games, locked in a legal tussle with Apple after the tech giant yanked ‘Fortnite’ from its app store, has raised $1 billion. PHOTO: EPIC GAMES
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“Fortnite” creator Epic Games Inc. is now valued at $28.7 billion after raising more capital, Sarah E. Needleman reports in The Wall Street Journal. Sony Group Corp. led the $1 billion investment, with participation from Baillie Gifford, KKR & Co., the Ontario Teachers’ Pension Plan Board and BlackRock Inc., among others.
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Waud Capital Partners is acquiring a majority stake in venture capital-backed software provider TeamSnap and is committing fresh equity into the company to support its future growth. Boulder, Colo.-based TeamSnap offers software used by the amateur sports industry, including sports clubs and teams and leagues. Peter Frintzilas, an executive partner at Waud, will become the company’s chief executive, while Andrew Rueff, an operating partner at Waud, will become TeamSnap’s executive chairman. Dave DuPont, the company’s founder and current CEO, will retain a financial stake in TeamSnap and continue to play a role on the executive team. Although Waud didn't disclose terms of the deal, a person familiar with the deal said the Chicago-based private-equity firm’s equity investment fell between a $50 million to
$150 million range that typifies most of its deals. Boulder-based venture firm Foundry Group is among TeamSnap’s largest previous investors, the person said.
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Mexican broadcast and media giant Grupo Televisa SA agreed to combine its television content business with Univision Communications Inc., creating a new company backed by investments from SoftBank Group Corp., investment firm Raine Group and Google Inc., Anthony Harrup and Santiago Pérez report for The Wall Street Journal. The tie-up aims to expand streaming-video services in Spanish-speaking markets.
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Blackstone Group Inc.’s Blackstone Energy Partners has agreed to acquire energy and telecommunications infrastructure provider Sabre Industries Inc. from midmarket firm Jordan Co. The company offers products and services that include utility transmission structures, wireless and small cell towers, as well as engineering, design, testing and inspection and other services. The Jordan Co. acquired Sabre in 2019 from another midmarket private-equity firm Kohlberg & Co.
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Apollo Global Management Inc. is buying a 51% stake in publicly traded automotive industry supplier ABC Technologies Holdings Inc. for 10 Canadian dollars a share, or about C$276.6 million (equivalent to roughly $220.2 million) in all from Cerberus Capital Management. The price could increase to as much as C$10.64 a share, or C$294.3 million, if the Toronto-based company closes certain acquisitions within 12 months of the closing date. ABC Technologies manufactures highly engineered plastic components for makers of cars and light trucks. Shares of the company were initially sold in a public offering in February and are listed on the Toronto Stock Exchange. Cerberus first
backed the company about four years ago.
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Capital Dynamics, a Swiss asset manager, has agreed to build a 200-megawatt solar energy project that will be leased to electric utility Northern Indiana Public Service Co., a unit of NiSource Inc. The Zug, Switzerland-based multistrategy firm said it is investing in the project through its Clean Energy Infrastructure arm, which had about $6.6 billion in assets under management, including built projects and tax equity, as of last September. Construction of the Gibson County, Indiana project is expected to begin next year.
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Hellman & Friedman has agreed to purchase a majority interest in oil and energy industry data provider Enverus from Genstar Capital. Genstar acquired a majority stake in the Austin, Texas-based software-as-a-service company in 2018. The San Francisco-based firm plans to retain a minority interest in the company following the sale.
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Carlyle Group Inc. is taking a majority stake in the owner of the popular skin-care and cosmetics brand Beautycounter, Miriam Gottfried and Cara Lombardo write for The Wall Street Journal, citing executives from the companies. The investment, which values parent Counter Brands LLC of Santa Monica, Calif., at $1 billion, will be used to increase consumer awareness of the fast-growing brand and bolster its digital-sales platform.
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Tiger Global Management led a $60 million investment in healthcare company Papa Inc. The Miami-based company serves older adults and families through health plans and employers.
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Insight Partners led a $50 million investment in internet of things company Seeq Corp., joined by existing investors Altira Group, Chevron Technology Ventures, Cisco Investments, Saudi Aramco Energy Ventures and Second Avenue Partners. The Seattle-based company’s software is used by manufacturers and in energy industries to calibrate processes based on data that can be rapidly found and shared.
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Cross Creek Capital led a $40 million investment in app company MyPizza Technologies Inc., which does business as Slice, joined by 01 Advisors, a new investor in the business. Also participating were existing backers KKR & Co., GGV Capital and Primary Ventures, according to an emailed news release. The New York-based company provides technology, services and data analytics to independent pizzerias on a fixed-cost per order basis.
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Healthcare-focused private-equity firm HealthEdge Investment Partners LLC has invested in home infusion services company Specialty Pharmacy Nursing Network Inc.
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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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Some special-purpose acquisition companies have improperly accounted for warrants sold or given to investors, securities regulators said Monday, stepping up scrutiny of the popular vehicles, Dave Michaels writes in The Wall Street Journal. Warrants are a standard part of how SPACs raise money, including from hedge funds and other private investors. The potential return for early investors in SPACs is huge if the company’s shares rise because of various features of the investment’s structure, including warrants that give some investors the right to buy more shares at a preset price in the future.
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A blank-check company backed by TPG has raised about $285 million through an initial public offering of shares, including $35 million sold to underwriters through overallotment options. TPG Pace Solutions Corp. aims to acquire a private business with strong growth potential.
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Partners Group is selling a U.S. industrial property collection that includes 14 warehouse/distribution centers used in e-commerce and 74 light industrial buildings at a valuation of more than $1 billion. The portfolio has a combined leasable area of 8.6 million square feet primarily located across the Mid-Atlantic and Southeast regions, including the Atlanta and Washington metro areas. Partners said the sale produced a two-times return on its investment. The buyer wasn't named.
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Crosspoint Capital Partners has collected $1.3 billion for its debut private-equity fund, or 30% more than its goal. Crosspoint Capital Fund I LP focuses on investments in the cybersecurity, privacy and infrastructure software sectors. Menlo Park, Calif.-based Crosspoint was founded in December 2019. PJT Park Hill served as placement agent for the fundraising. One investor that approved a $20 million commitment to the fund is the Colorado Fire and Police Pension Association, according to pension disclosures.
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Chicago-based RCP Advisors has rounded up at least $435 million for its latest midmarket fund of funds, RCP Fund XV LP, according to a regulatory filing. The amount raised to date exceeds a $300 million target indicated in the filing, which also states that the fund’s final size will not exceed $500 million, excluding amounts committed by the general partner itself and its affiliates. RCP typically backs buyout funds ranging from $250 million to $1 billion in committed capital, according to its website.
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John Browne, Lord of Madingley and former group chief executive of energy company BP, has joined growth investment firm General Atlantic as a senior adviser on environmental, social and governance considerations with a focus on climate solutions and net-zero emissions.
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Private-equity fund formation lawyer Bryan Hunkele has joined Ropes & Gray LLP as a partner in New York. He joins the firm from Fried Frank Harris Shriver & Jacobson LLP in New York, where he was named a partner two years ago.
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StepStone Group Inc. has named Valerie G. Brown as an independent director, expanding its board to 11 members. Most recently, Ms. Brown served as executive chairman of wealth-management firm Advisor Group Inc.
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The judge overseeing the bankrupt Zohar investment funds refused their request to block their founder, turnaround manager Lynn Tilton, from buying one of their portfolio companies in a sale that leaves them with a roughly $150 million loss on loans to the business, Andrew Scurria writes for WSJ Pro Bankruptcy. Judge Karen Owens of the U.S. Bankruptcy Court in Wilmington, Del., approved the sale of Global Automotive Systems LLC for $32 million to an affiliate of Ms. Tilton, giving her control of the auto supplier but leaving little for the Zohar funds that own the company.
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Private-equity firms are expected to embrace a hybrid format for their annual investor meetings, which will be a mix of virtual and in-person meetings, according to a survey of 58 general partners conducted by public relations firm Prosek Partners. Nearly 86% of survey respondents indicated they would consider a hybrid model even after in-person meetings become viable. Survey participants manage assets ranging from $2 billion to $50 billion.
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Pattern Energy Group has set up a joint venture with publicly traded Talen Energy Corp. to invest as much as $2 billion in the development and operation of about 1.4 gigawatts of renewable energy projects during the next five years. The joint venture, called PT Energy Transitions, is an outgrowth of an earlier project the two collaborated on, Montour Solar One, a 100-megawatt solar installation in Washingtonville, Pa.
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Shares of Altimeter Growth Corp., the special-purpose acquisition company backed by Brad Gerstner's technology-investing firm Altimeter Capital erased earlier losses and climbed roughly 10% on Tuesday after announcing the merger to take Singapore-based Grab Holdings Inc. public, Amrith Ramkumar writes for The Wall Street Journal. The SPAC announced the deal to bring Grab public early Tuesday in a transaction that is expected to raise more than $4 billion in cash proceeds for the Southeast Asia delivery company.
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