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Lone Pine Re-Enters Private-Equity Investing | Growth Deal Values Wiz at $12 Billion
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Good morning! Today our Maria Armental offers an exclusive look at the re-entry of Lone Pine Capital as a private-equity investor after a two-year absence.
Next our CIO Journal colleague Steven Rosenbush reports on a $1 billion growth-equity deal to back cybersecurity company Wiz at a $12 billion valuation.
We have these and many more deals, exits and people moves detailed below, so please read on...
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Lone Pine in a letter said it acquired a minority stake in Australian design-software developer Canva in April. PHOTO: CANVA
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Investment firm Lone Pine Capital resumed backing private companies, more than two years after shifting its focus to publicly traded businesses. The Greenwich, Conn.-based firm has backed Spotnana Technology and Canva, the first private investments in new portfolio companies since December 2021, WSJ Pro’s Maria Armental reports, citing a letter to investors.
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Wiz said Tuesday that growth investors provided $1 billion in fresh capital through a deal that valued the fast growing cloud security startup at $12 billion, Steven Rosenbush writes for CIO Journal. Wiz said the transaction was led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital. Greylock Partners, Wellington Management and existing investors Cyberstarts, Greenoaks, Index Ventures, Salesforce Ventures, Sequoia Capital and former Starbucks chief executive Howard Schultz
also participated.
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$35.1 Billion
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The amount raised for infrastructure-focused funds in this year’s first quarter, up almost 39% from the same period last year but down 49% from last year’s fourth quarter, according to data provider Preqin
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WSJ Pro is currently conducting our survey of secondary buyers for our 2024 Guide to the Secondary Market. WSJ conducts this annual survey of buyers to gauge deal activity in the private-equity secondary market. We are seeking information about secondary buyer portfolios and expectations for secondary market dealmaking in 2024. The deadline for completing the survey is Thursday May 9, 2024. Secondary investors can access the survey here.
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A spring display by the Navy's Blue Angels aerobatics team above Annapolis, Md., where Hannon Armstrong is located. PHOTO: SAUL LOEB / AGENCE FRANCE-PRESSE / GETTY IMAGES
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Climate-focused Hannon Armstrong Sustainable Infrastructure Capital said it has formed CarbonCount Holdings 1 with KKR & Co. to invest as much as $2 billion in “climate positive projects” in the U.S. The two firms each committed up to $1 billion in investment capital to the vehicle to back clean-energy assets over the coming 18 months, according to a securities filing. Annapolis, Md.-based Hannon Armstrong said its securities subsidiary will source investments for the vehicle, which the publicly traded
firm will manage.
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Buyout firm KKR & Co. is acquiring the corporate trust and wealth management operations of Australia-based Perpetual in a deal worth around 2.18 billion Australian dollars (US$1.44 billion), Alice Uribe reports for The Wall Street Journal. Perpetual has entered into a scheme implementation deed with an affiliate of KKR, who will acquire 100% of the two businesses via a scheme of arrangement for a cash consideration that is 16.3 times its last 12 months’ earnings before interest and tax, the financial company said. The deal is expected to be completed in February 2025, subject to the satisfaction of customary conditions, it said.
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Turnspire Capital Partners said it is acquiring the nutrition ingredients and formulations business of Ashland Inc., which supplies its products to drug makers, manufacturers of nutritional drinks and supplements, as well as certain medical markets. Called Ashland Nutraceuticals, the operation has around 500 workers and plants in New Jersey, Utah and Mexico. Ashland began a restructuring of the segment of its Life Sciences group last year, according to a regulatory filing last week.
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Charlesbank Capital Partners in Boston said it has acquired and combined dental membership plan management software providers Kleer in Wayne, Pa., and Membersy in Austin, Texas, to form Kleer-Membersy. Spectrum Equity said in September 2021 that it had invested $66 million in Membersy. The combined business provides software and systems used by dental groups to set up and run dental-services plans.
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Canadian investment firms Desjardins Capital and W Investments Group said they are buying Group BFL, a Quebec-based company that designs and manufactures high-efficiency recovery, heating and ventilation systems heating.
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Buyout firm KKR & Co. in New York said it is acquiring Unizo Hotel Co. and 14 hotel properties in Japan from Unizo Holdings and reflagging the operations under Marriott International’s Sheraton brand. The properties offer more than a combined 3,600 rooms across 10 cities.
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Private-equity firms led by Stone Point Capital, Clayton, Dubilier & Rice and Mubadala Investment have closed the all-cash acquisition of broker Truist Insurance Holdings from Truist Financial at an implied enterprise value of $15.5 billion, completing a transaction announced in February. An investment option offered to brokerage employees drew more than 1,500 participants in the deal. Renamed as TIH Insurance Holdings, the broker with nearly 10,000 employees and over 200 branch offices is based in Charlotte, N.C.
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Thomas H. Lee Partners has closed its previously announced acquisition of medical technology management company Agiliti. THL paid $10 a share for the publicly traded company, giving the deal an implied enterprise value of $2.5 billion.
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Silver Oak Services Partners in Evanston, Ill., said it led a recapitalization of Beary Landscaping in Lockport, Ill. The company serves commercial clients providing groundskeeping and snow removal services to more than 1,200 customers in states including Illinois, Indiana, Pennsylvania, Michigan and Wisconsin.
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Investment firm Butterfly Equity in Los Angeles said it has separated Bolthouse Farms into two separate businesses, Bolthouse Fresh Foods and Generous Brands. Consumer-focused Butterfly acquired the predecessor company in 2019 through a carve-out from Campbell Soup.
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Summit Ridge Capital Partners is providing as much as $94 million in financing to sustainable maritime operations company Compagnie Maritime Monegasque, with Panorama Capital Partners participating as a co-investor. The company plans to use the financing to expand its fleet with ethanol-powered platform supply vessels in Brazil.
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Comvest Credit Partners is supporting a $70 million senior secured credit facility for Nationwide Energy Partners, a provider of utility management services based in Columbus, Ohio.
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Etude Storage Partners, an investment firm focused on self-storage companies, said it has sent a letter to the board of directors of publicly traded Global Self Storage offering to acquire outstanding shares of the company for $6.15 each. The private investment firm said it had submitted two previous offers for the company, both of which were rejected by the board.
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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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Lower midmarket firm Round Table Capital Partners said it has sold a majority stake in portfolio company Verdantas to fellow private-equity firm Sterling Investment Partners. Roundtable’s ownership of Verdantas dates back to 2020 when it acquired consulting business Hull & Associates, which the firm later combined with four other companies to form Verdantas. Round Table retains a significant equity stake in Verdantas along with the company’s management. Tampa, Fla.-based Verdantas offers environmental science, engineering and consulting services.
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Growth investors including Forgepoint Capital, Insight Partners and Lightspeed Venture Partners may be in line to benefit from a roughly $450 million acquisition of cybersecurity company Noname Security by strategic buyer Akamai Technologies, which was made public Tuesday. The San Jose, Calif.-based company specializes in providing security systems used with application programming interface technology, which has become a popular target area for hackers. Akamai said the deal is expected to boost its fiscal 2024 revenue by about $20 million. The three firms participated in a $135 million Series C investment that valued the business at
about $1 billion in late 2021, according to data provider CB Insights.
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The Halifax Group said it sold its majority stake in Southern Exteriors to fellow private-equity investor Monomoy Capital Partners. Based in Jackson, Ga., Southern Exteriors offers exterior building products, such as siding and gutters, for residential homebuilders. Halifax initially backed the company in 2021.
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Partners Group Holding in Switzerland said it has set up an evergreen private-equity fund tailored to individual investors that meets European Long Term Investment Fund standards for investor protection and easier administration. Partners Group Private Equity Evergreen is distributed across Europe and requires a minimum investment of $10,000 or €10,000, equivalent to about $10,768, and can be adjusted monthly.
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Blackstone has reached into former Goldman Sachs Group-backed Global Atlantic Financial Group to hire Philip Sherrill as global head of insurance, working with Gilles Dellaert, the New York firm’s global head of Blackstone credit and insurance. The firm said its insurance operation has tripled in size in about four years and now has more than $200 billion in assets. Sherrill was Global Atlantic’s chief strategy officer.
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Financing provider Trinity Capital said it has hired a trio of executives from Ally Bank to form a sponsor finance group and expand its operations in that segment, including lending to private equity-backed businesses. Chris Erro and Jorge Sandoval join as senior managing directors and Will Cook as a director, with both Sandoval's and Cook’s roles created within the company’s credit and portfolio operation.
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Wall Street compensation consulting group Johnson Associates said the outlook for bonuses indicates payouts this year will be flat to up 5% at alternative asset managers, where private equity topped all others in 2022 but was flat last year, with constrained fundraising holding back smaller firms. Johnson said the outlook for carry payments indicates smaller payouts unless headcount is reduced, while some current funds won’t provide any carry payouts. Incentive pay for investment bankers is expected to rise from multi-year lows as the business rebounds. With the advent of artificial intelligence applications and declining headcounts, personnel managers are expected to hold merit pay increases to 3% to 3.5%, according to Johnson.
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PNC Financial Services Group and TCW Group are joining forces to create a new private credit provider for middle market companies. The new strategy will focus primarily on directly originated, senior secured cash-flow and asset-based loans to both sponsored and non-sponsored middle market companies. It aims to have $2.5 billion of investor equity available to invest in the first year, thanks partly to anchor investments from PNC and TCW shareholder Nippon Life.
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Growth-capital investment specialists based in the U.S. dominated the latest performance rankings for the strategy by HEC Paris Business School and Wall Street Journal publisher Dow Jones, Sebastian McCarthy reports for sister publication Private Equity News in London. Ampersand Capital Partners in Wellesley, Mass., Spark Capital and Spectrum Equity, both in Boston, ranked first, second and third. The only non-U.S. firm in the top 10, Clairvest in Toronto, ranked fourth.
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Asset manager and advisory firm GCM Grosvenor in Chicago said its fee-related earnings for the first quarter rose 26% to $38.1 million from about $30.4 million in the year-earlier period while assets under management climbed about 4.7% to $78.78 billion. The firm said it ended March with about $30 billion in private-equity assets and $26.9 billion in sustainable or impact strategies, along with $14 billion in infrastructure assets and $13.6 billion under management in credit strategies. The firm also managed hedge
funds holding about $23.6 billion and $6.1 billion in real estate. The firm posted net income of about $2.1 million, or a 13-cent per share loss, on revenue of about $108.9 million for the just-ended quarter compared with a $1.2 million loss, or 10 cents a share, on revenue of about $99.1 million in the year-earlier quarter.
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