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States Wrestle With Private Equity Over Healthcare | White Deer Raises $240 Million Fund for Flogistix
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Good Day! Today our Chris Cumming reports on efforts to rein in private-equity investing in certain healthcare segments in statehouses around the country amid rising concerns over how profit-seeking capital providers influence patient care.
Also, our Luis Garcia delves into the rationale behind a $240 million continuation fund put together by White Deer Energy to back a methane-capture business, with GCM Grosvenor leading investors in the new vehicle.
We have these and many more deals, exits and fundraisings sketched out for you below, so please read on...
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Lawmakers in statehouses across the country are drawing up bills to restrain private-equity investment in healthcare. Above, the California state Capitol in Sacramento.
PHOTO: RICH PEDRONCELLI / ASSOCIATED PRESS
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Statehouses across the country are enacting laws to curtail private-equity healthcare acquisitions, part of a political backlash against corporate consolidation in the medical sector, Chris Cumming writes for WSJ Pro Private Equity. More than a dozen states have passed laws to require corporate buyers such as private-equity firms to notify states of planned healthcare acquisitions. In some cases, these laws let state authorities block deals if they consider them against the public interest. Most of these bills have passed in Democratic-controlled states, but last month Indiana became the first red state to enact a private-equity healthcare merger-review law. Debate over similar measures continues in other
states.
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Alternative-investments manager GCM Grosvenor has backed a $240 million deal to let private-equity firm White Deer Energy extend its decadelong ownership of methane-capturing systems provider Flogistix, which is expected to benefit from growing efforts to reduce carbon emissions, Luis Garcia reports for WSJ Pro Private Equity. Houston-based White Deer recently wrapped up a so-called continuation fund, White Deer Thunder, to buy Flogistix from an older vehicle, White Deer Energy II, said Joe Bob Edwards, a managing partner with the firm. Continuation funds let private-equity fund sponsors retain assets they aren’t ready to sell while
providing a way for fund investors to cash out, typically as an aging pool nears its termination date.
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$81.48 Billion
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The value of announced oil-sector deals in this year’s first quarter, the most for the period since 2020, S&P Global Market Intelligence reports
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Affinity Equity Partners is buying the car rental business of SK Networks in Korea.
PHOTO: SEONGJOON CHO / BLOOMBERG NEWS
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Asian private-equity firm Affinity Equity Partners is buying the car rental business of SK Networks as the South Korean company pares its debt and focuses on growing its artificial-intelligence business, Kwanwoo Jun reports for the Journal. Affinity Equity has agreed to pay around 850 billion won, or roughly $611.5 million, for the operation, SK Networks said late Tuesday. Hong Kong-based Affinity manages $14 billion in assets.
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Buyout firm TPG is investing $235 million in counterparty and supply-chain-risk evaluator Sayari, backing the business through the firm’s midmarket growth strategy. Company founders, employees and existing investors retain significant stakes as well. The Washington-based company provides supply-chain risk-management systems to federal agencies as well as governments and commercial organizations in more than 35 countries.
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Finnish sovereign-wealth fund Solidium led a $93 million growth investment in satellite radar company Iceye, joined by Move Capital, Blackwells Capital and other new and existing investors, according to a company release. Finland-based Iceye develops satellite-borne synthetic aperture radar systems used for surface observation, weather monitoring and managing responses to catastrophes.
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Dawn Capital in London said it led a €45 million growth investment, equivalent to about $47.8 million, in payments systems maker Flatpay, joined by others including Seed Capital Denmark, according to a LinkedIn post by the company and a Medium blog by Dawn executives. The Denmark-based company’s technology is used by smaller businesses to process retail payments.
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Publicly traded buyout firm Deutsche Beteiligungs in Frankfurt said it has sold part of its stake in field sales, services and transportation-management company Solvares to Five Arrows, the alternative-assets arm of Rothschild & Co. Deutsche Beteiligungs said the deal for a significant stake valued the business at slightly more than the value the firm used at the end of last year. Deutsche Beteiligungs has backed the company since 2018 and said its 2022 sales reached about €37 million, or roughly $39.3 million, in a profile on the firm’s website.
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Growth investor General Atlantic in New York has acquired a majority interest in sustainability benchmarking company Gresb from Summit Partners, which remains as a minority investor. The Amsterdam-based business develops sustainability standards and benchmark measures for real assets. General Atlantic is backing the business through its climate-focused BeyondNetZero strategy. Summit first backed Gresb about four years ago.
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Argosy Capital in Wayne, Pa., said its private equity arm has acquired a controlling interest in Federal Rent-A-Fence, a West Berlin, N.J.-based provider of temporary barriers using chain-link fencing and gates. The company also provides set up and breakdown for clients from 15 East Coast and Midwest locations.
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One Equity Partners has acquired materials handling equipment supplier Ballymore Safety Products from Graycliff Partners. The Coatesville, Pa.-based company designs, develops and manufactures highly engineered lifting and safety-related products. Graycliff first invested in the company about three years ago.
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Godspeed Capital Management said it is acquiring defense contractor Special Aerospace Services to begin a rollup strategy targeting space engineering, communications technology and aerospace businesses serving U.S. defense and intelligence agencies as well as commercial customers.
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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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Global Infrastructure Partners in New York is selling a stake of just over 50% in Scotland’s Edinburgh Airport to strategic buyer Vinci Airports for £1.27 billion, or roughly $1.6 billion, while retaining a slightly smaller than 50% interest in the airfield, Helena Smolak reports for Dow Jones Newswires. GIP, as the firm is known, acquired the airport in 2012. Managers of the facility will remain in place following the deal, which is expected to close later this year.
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One Equity Partners said it has sold packaging and engineered-materials company Walki Group to strategic buyer Oji Holdings, closing a deal first disclosed in October. Finland-based Walki employed about 1,700 workers and operated 17 plants worldwide, generating about €705 million, or around $796.4 million, in fiscal 2022 revenue, Oji said at the time. One Equity invested in the business around five years ago.
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Private-equity firm Affinity Equity Partners in Hong Kong said it has sold a remaining stake of about 17% in Indonesian herbal medicines provider PT Industri Jamu dan Farmasi Sido Muncul to its controlling investor, the Hidayat family, for about $233 million. The Asian buyout firm first backed the company more than six years ago.
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Abu Dhabi National Energy Co., also known as Taqa, confirmed that it is discussing the acquisition of stakes in Spanish natural gas company Naturgy Energy Group held by buyout firm CVC Capital Partners and Global Infrastructure Partners, or GIP, as well as private investment firm Criteria Caixa. Reuters, which first reported the discussions, said the three firms between them own almost 67% of Naturgy’s equity, with GIP and CVC each owning 20%. Taqa
said that if the discussions are successful, it would offer to buy the rest of Naturgy’s equity. The company had a market value of roughly €20.68 billion, or $22 billion, on Tuesday. Its shares rose 6.1% Wednesday in Madrid.
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New Mountain Capital in New York has collected more than $12.37 billion so far for its New Mountain Partners VII fund, a regulatory filing shows. Investors include the Washington State Investment Board, according to the WSJ Pro Private Equity LP Commitments database. New Mountain had a $12 billion target for the fund, according to research provider PitchBook Data. The firm’s predecessor vehicle, New Mountain Partners VI, closed on about $9.6 billion over three years ago. The firm said in an annual report to the Securities and Exchange Commission last month that it managed more than $27.29 billion at the end of last year.
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Asset manager Wellington Management in Boston said it has wrapped up its Wellington Climate Innovation Fund with $385 million to back growth-stage companies that provide ways to mitigate the effects of climate change. The firm, with more than $1.2 trillion in assets, manages the fund through its private investing group, which oversees about $8.5 billion.
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Arsenal Capital Partners in New York said it has added Raymond Hill as an operating partner working with the firm’s healthcare group, focusing on pharmaceutical services. He was most recently the chairman and chief executive of drug testing company CorEvitas, according to an emailed statement
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Swiss investment firm Jacobs Holding said it is bringing on Timothy Franks as chief executive, starting May 1. He previously held leadership roles as a KKR partner in London.
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Newly formed Seine Capital in Paris is targeting $150 million for a small-cap secondaries fund, Rod James reports for WSJ Pro Private Equity, citing Partner Sol Zein. The firm aims to invest $3 million to $15 million predominately acquiring stakes in buyout funds, but will also acquire interests in growth, credit and infrastructure funds, Zein said. Seine is led by Managing Partner Fabrice Moyne, the former head of secondary investments at Mantra Investment Partners, with Partner Chad Zidow, formerly with Beneficient.
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Technology-focused Edison Partners in Princeton, N.J., said it is opening an office in Nashville, Tenn., where roughly half of its staff will be located. The firm said that staff proportion may expand in the future.
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