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EQT Makes $12 Billion U.S. Infrastructure Bet | Azimut to Take Stake in Credit Firm | H.I.G.-Backed Adtech Firm Nears SPAC Deal
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Good day and welcome to the Private Equity Pro newsletter. Lawmakers on Capitol Hill have been bogged down in infrastructure negotiations for months, but private-equity firms are not waiting for a bill to invest. Today, WSJ Pro Private Equity’s Luis Garcia reports on three major investments by EQT AB in the U.S. infrastructure sector totaling roughly $12 billion. Next, I report on the latest deal in the red-hot market for general-partner stakes: Azimut Alternative Capital Partners, an Italian group formed two years ago to invest in midmarket sponsors, buying a stake in asset-based lender Pathlight Capital. Finally, the Journal’s Amrith Ramkumar reports that AdTheorent Inc., an advertising-technology company majority owned by H.I.G. Capital, is nearing a sale to a blank-check company at a price tag
of around $1 billion.
Now on to today’s news ...
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Workers set up solar-power equipment in 2017 at a site in Silverton, Ore., being developed by Cypress Creek Renewables.
PHOTO: ANNA REED / ASSOCIATED PRESS
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Multistrategy investor EQT AB recently made three infrastructure deals in the U.S. totaling about $12 billion as the Swedish firm bet that rising demand for clean energy will raise returns even as its rivals pour capital into the sector, Luis Garcia reports for WSJ Pro Private Equity. Stockholm-based EQT earlier this month agreed to acquire solar-project developer Cypress Creek Renewables LLC—the firm’s first investment in the U.S. renewable sector in a deal worth more than $2 billion, according to a person familiar with the matter. The firm is also buying waste-to-energy company Covanta Holding Corp. and the North American transport operations of FirstGroup
PLC.
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H.I.G. Capital-backed AdTheorent Inc. is nearing a combination with a special-purpose acquisition company to go public in a deal that would value the New York company at about $1 billion, Amrith Ramkumar reports for The Wall Street Journal, citing people familiar with the matter. AdTheorent uses machine learning and data science to optimize advertising and marketing campaigns for its customers. It says it can efficiently target consumers without using sensitive personal data. H.I.G backed the business in February 2017, investing through its growth partners strategy.
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Azimut Alternative Capital Partners has agreed to buy a stake in Pathlight Capital, an asset-based lender in Boston, Chris Cumming writes for WSJ Pro Private Equity. Azimut will take a stake of about 20% in Pathlight and provide permanent capital in the future, according to a news release. Azimut is a unit of Milan, Italy-based asset manager Azimut Group which was set up in 2019 to buy stakes in private-market firms.
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2021 Women to Watch List
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Since 2015, WSJ Pro and our sister publication The Private Equity Analyst have published our annual Women to Watch list in recognition of the outstanding achievements of female dealmakers, fundraising professionals and limited partners across the private-equity and venture capital industries. We are accepting nominations for this year’s list until Aug. 13. Please click on the link below to submit your nomination! We will announce this year’s list in early October.
Submit your nomination here.
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$170.45 Billion
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The amount of fresh capital raised by U.S. private-equity firms across 354 funds that closed during the second quarter, according to S&P Global Market Intelligence data
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Bathers and children enjoy the waters off Alameda Beach, silhouetted by the skyline of San Francisco, where Medallia is based.
PHOTO: JOHN G. MABANGLO / SHUTTERSTOCK
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Thoma Bravo has agreed to take private customer-management software provider Medallia Inc. for $34 a share in a deal that values the company at $6.4 billion. The San Francisco-based company is backed by investment firms including Sequoia Capital, which owned about 28% of the software-as-a-service company’s equity as of mid-April. Medallia shares hardly budged in Monday trading. The Thoma Bravo offer represents a roughly 1.9% premium to the company’s closing price Friday. The stock traded above $47 as recently as January. Medallia said the offer is about 20% above its share price on June 10, the last day of trading before media speculation appeared concerning an acquisition
of the business. Thoma Bravo said owners of about 34% of the shares have agreed to the deal, which includes a 40-day go-shop period for the company to find a better offer.
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Stonepeak Partners is acquiring the Latin American fiber-optic network, data center and related assets of communications infrastructure company Lumen Technologies Inc. for about $2.74 billion, or roughly nine times the operation’s estimated adjusted pre-tax earnings last year, according to a Securities and Exchange Commission filing. Stonepeak said the AustralianSuper pension fund is also backing the deal. Earlier this month, Stonepeak raised $2.75 billion for a renewable-energy fund.
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Lime Rock Management-backed Lime Rock Resources has agreed to acquire oil and gas fields in the Delaware Basin of West Texas for $508.3 million. Most of the acquired fields are in Loving County and in April were producing more than 15,000 barrels a day of crude oil and equivalent volumes of natural gas, according to a news release. The seller wasn't identified. Lime Rock Resources is an operating arm of the Westport, Conn.-based firm, which also backs clean-energy companies.
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Kayne Anderson Capital Advisors is investing more than $400 million in Kraken Resources II LLC in Houston, backing the company alongside its management. The oil and gas company was formed to invest in large, oil-weighted assets, initially focused on the Williston Basin area. Kayne Anderson is investing through its eighth energy fund and its second private energy income fund.
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Ardian is negotiating for a controlling stake in data and digital-marketing company Artefact SA. The Paris-based company’s main shareholders have agreed to enter into exclusive negotiations with Ardian in a deal that would value the company at €328.9 million, or about $388 million, and give the private-equity firm roughly 52% of voting rights, according to a news release. Artefact’s directors have approved the proposed deal.
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Franklin Templeton and existing investors Temasek Holdings and Vertex Venture Holdings led a $71 million investment in computer technology company Blaize Inc., according to an emailed news release. The El Dorado Hills, Calif.-based company provides software and systems designed for automotive and other applications, using artificial-intelligence techniques to help make electric vehicles more efficient. Other investors in the company include automotive industry manufacturers.
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KKR & Co. has acquired three self-storage sites in Texas and Tennessee for about $36 million. The New York firm said the properties in Austin and Nashville include about 1,800 units and were constructed in 2019 and 2020. KKR is investing through its Americas opportunistic equity real estate strategy.
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H.I.G. Capital in Miami has recapitalized TW Associates LLC, which does business as Miscowater, and added it to a newly formed operating group called United Flow Technologies. H.I.G. set up the group to invest in municipal and industrial water and wastewater assets. Based in Foothill Ranch, Calif., Miscowater distributes processing equipment to the industry.
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Arkview Capital and venture investor Stephen H. Gordon led a $57 million investment in newly formed Genesis Bank, a commercial lender being organized in Southern California. Arkview, whose founders include Joon Chang, Pavel Chernyshov and Vijay Mehta, is a minority-led private-equity firm that focuses on backing diverse businesses. Mr. Gordon is managing member of Gordon Ventures and the founding chairman and chief executive of Genesis.
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Healthcare-focused Athyrium Capital Management has agreed to invest $125 million in publicly traded Puma Biotechnology Inc. The firm expects to receive notes from the Los Angeles-based company, which plans to use $100 million of the new funds to repay a loan from Oxford Finance. Puma is developing drugs for cancer treatments.
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Bruin Capital, whose investors include Jordan Co. and CVC Capital Partners, has agreed to acquire a controlling interest in sports simulator maker Full Swing Golf Inc. from North Castle Partners. North Castle intends to remain an investor in the Carlsbad, Calif.-based company. Bruin invests in and operates technology, sports, media and marketing companies and has about 2,100 employees working from 34 offices worldwide.
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Cerberus Capital Management has invested in the Lighthouse Autism Center, backing the company alongside Abry Partners and the company’s founder and chief executive, Gregg Maggioli. South Bend, Ind.-based Lighthouse provides services to children diagnosed with autism spectrum disorder.
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French bank insurance firm Crédit Mutuel Alliance Fédérale’s private-equity arm has invested $30 million in payments-processing systems company Paystone Inc. The London, Ontario-based company’s technology is used to process debit and credit card payments.
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Beringer Capital has acquired real estate media company Inman Group LLC. The Tallahassee, Fla.-based company publishes news, commentary and other products focused on residential property brokers, their suppliers and related areas.
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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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The Saudi Public Investment Fund, a sovereign wealth vehicle, stands to gain nearly $20 billion from a blank-check deal to bring Lucid Group Inc. public, Matt Grossman reports for The Wall Street Journal. The shares rose 11% Monday after the deal closed with Churchill Capital Corp. IV, ending their first day of trading at $26.83 each. The Saudi fund invested $2.9 billion in the electric vehicle company in 2018, giving it a majority stake.
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A blank-check company backed by Apollo Global Management Inc. is paring back the amount of capital it aims to raise to $300 million as several other special-purpose acquisition companies take similar steps. Spartan Acquisition Corp. IV said in March that it planned to raise $400 million, but in an amended registration statement dated Friday, the firm listed the smaller amount as its target without offering an explanation for the reduction. The SPAC is focused on the renewable energy sector. Other planned blank-check company IPOs that are reducing their targets include Jupiter Acquisition Corp.
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Onex Corp. has partly exited insurance distributor Ryan Specialty Group Holdings Inc. through the Chicago company’s initial public offering of shares last week that raised about $1.26 billion. The $23.50 per share deal gave Ryan a market capitalization of about $6 billion. Onex said it received about $490 million in related transaction proceeds and still owns about 12.3 million Ryan shares. The Toronto-based firm first backed the distributor in 2018 and ultimately invested about $305 million in the business, owning about 35% of the common stock before the IPO.
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RxSight Inc., a medical technology company backed by firms including RA Capital Management and H.I.G. Capital’s bioventures strategy has set a price range of $16 to $18 a share for its initial public offering, Robb M. Stewart reports for Dow Jones Newswires. The Aliso Viejo, Calif.-based company expects to net $113.5 million from the offering, or $130.9 million if the underwriters' option is used in full, at the midpoint of the price range.
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Deerfield Management-backed Nuvalent Inc. plans to sell 8.9 million shares in an initial public offering priced from $16 to $18 each, to raise as much as $184.2 million, Robb M. Stewart reports for Dow Jones Newswires. Deerfield’s holding in the company is expected to fall to about 51% from 65%, while fellow backer Bain Capital’s life science’s strategy will see its stake drop to about 5.9% from 7.3%.
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Casdin Capital-backed Maxcyte Inc. has set a price range on its U.S. initial public offering of 12 million shares, saying it plans to sell the issue at $11.50 to $13.50 a share, Chris Wack reports for Dow Jones Newswires. The Gaithersburg, Md.-based biotechnology company develops technology used in cell engineering as well as cell-therapy approaches to treating diseases such as cancer. Maxcyte shares already trade on the London Stock Exchange.
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Levine Leichtman Capital Partners in Los Angeles has sold food inspection company FlexXray Holdings LLC to Warburg Pincus in New York and Tilia Holdings, a Chicago firm that specializes in investing in food and nutrition supply chain companies. Arlington, Texas-based FlexXray provides X-ray inspection services for food companies and manufacturers to help them identify product contamination. Levine Leichtman first backed the company about four years ago.
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Canada-focused Vertu Capital and BDC Capital are selling virtual data room provider Firmex Inc. to strategic buyer Datasite LLC in Minneapolis. Vertu, which specializes in backing technology companies, and BDC Growth Equity Partners Fund I backed the Toronto-based software-as-a-services provider two years ago. The deal marks the first investment exit by Vertu since the firm was founded in 2017.
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Tikehau Investment Management SAS has closed its latest fund at more than €617 million, or roughly $728 million, the Paris-based asset manager said. The fund, Tikehau Special Opportunities Fund II, exceeded the firm's initial target by about 25%. The fund invests across private debt, private equity, real estate and other asset classes and is about 50% deployed, Tikehau said.
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Grafine Partners in New York aims to collect $500 million in commitments for its Grafine Capital I LP fund, a regulatory filing shows. Founded by former Riverstone Holdings partner Elizabeth Weymouth, Grafine focuses on backing experienced managers who are setting up their own shops. The firm is itself backed by RedBird Capital Partners.
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NightDragon has raised $750 million for NightDragon Growth I to invest in late-stage and growth companies in the cybersecurity, safety and privacy segments. NightDragon is led by senior software industry executive Dave DeWalt, the firm’s founder and managing director, joined by Ken Gonzalez as a managing director and Morgan Kyauk as a partner.
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Lazard Ltd.’s asset management arm has expanded its global alternatives investments operations and said it is hiring Robert Wall as the firm’s managing director and head of sustainable private infrastructure. He is joining the firm in October in London. He was previously a partner and member of the infrastructure investment committee in private markets at Federated Hermes.
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Blackstone Group Inc. has hired Brian X. Tierney as a senior managing director and global head of infrastructure portfolio operations and asset management. He joins from American Electric Power Co., where his roles included executive vice president for strategy. He replaces Steve Bolze in the infrastructure role. Mr. Bolze will become an executive advisor to the strategy starting in October.
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Z Capital Group has promoted Shahid Khoja to partner and Brian Morrison to director at the New York-based investment firm. Mr. Khoja joined the firm in 2020, while Mr. Morrison came aboard in 2019.
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Alternative asset manager White Oak Global Advisors in New York is forming a real estate-focused strategy, White Oak Real Estate Capital, and hired Eric Tanjeloff to oversee it as a managing principal. The vehicle will lend from $25 million to $150 million in loans backed by commercial real estate assets. Mr. Tanjeloff joins from Melody Capital Partners, where he was a managing director and head of real estate investments.
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The Leadenhall Building in London, home to Aon.
PHOTO: DANIEL LEAL-OLIVAS / AGENCE FRANCE-PRESSE / GETTY IMAGES
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Aon PLC and Willis Towers Watson PLC abandoned their planned combination on Monday, citing U.S. Justice Department opposition to the over $30 billion tie-up that would have created the world’s largest insurance broker, Ben Dummett and Dave Sebastian write for The Wall Street Journal. The department’s antitrust division sued to block the deal last month, saying it would lead to higher prices and reduced innovation for U.S. businesses, employers and unions that rely on their services.
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Colony Capital Inc. founder Thomas Barrack appeared in federal court in Brooklyn, N.Y., to answer charges that he secretly lobbied the U.S. on behalf of the United Arab Emirates and then lied to law enforcement investigators, the Associated Press reported. The chairman of former President Donald Trump’s 2017 inaugural committee pleaded not guilty Monday and later said he was “100% innocent” of the charges. Mr. Barrack, 74, was released last week on $250 million bail. “I think what you’ll find is that… over time, you’ll all see that I’m 100% innocent,” Mr. Barrack told reporters as he left the courthouse Monday.
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The bankrupt Limetree Bay oil refinery in the U.S. Virgin Islands asked a judge to halt pollution lawsuits from proceeding against its current and former private-equity backers, saying it can’t afford to be drawn into litigation against them, Andrew Scurria writes for WSJ Pro Bankruptcy. The lawsuits already are on hold against Limetree Bay Refining LLC after it filed for chapter 11 protection earlier this month, but are proceeding against its co-defendants, including its controlling owner, EIG Global Energy Partners. On Monday, the refinery asked the judge overseeing its bankruptcy to extend the litigation reprieve for 60 days to EIG and other, prior owners.
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One of the most important signals of future inflation has begun to ease in the past month, a development that should reassure the Federal Reserve in its prediction that the recent inflation surge will prove largely temporary, Gwynn Guilford reports for The Wall Street Journal. That signal is so-called inflation expectations: what businesses, consumers, workers and investors expect inflation to be over the next one to 10 years. Because such expectations can be self-fulfilling, economists consider them key to where inflation is going.
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China confirmed it would take drastic steps to restrain the country’s booming after-school tutoring industry, prompting further selloffs in stocks like New Oriental Education & Technology Group Inc. on Monday following publication of new restrictions over the weekend, Chong Koh Ping and Quentin Webb report for The Wall Street Journal. The moves are the Communist government’s most recent regulatory assault on a fast-growing part of the nation’s economy.
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Blackstone Group Inc. is extending its college skill-building program called Blackstone LaunchPad to nine City University of New York schools, including community colleges, City College of New York, Brooklyn College and Queens College. The firm’s charitable foundation has committed $6 million to help finance the program, which is designed to help students develop entrepreneurial skills and connect them with investment industry mentors.
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Reverence Capital Partners and fellow investor GTCR, which are acquiring Wells Fargo & Co.’s asset management arm, are renaming it Allspring Global Investments. The firms also named Joseph Sullivan as chief executive, succeeding Nico Marais, who is retiring when the deal closes. Allspring has about $604 billion in assets under management, including in publicly traded closed-end funds, with more than 480 professionals working from 24 offices worldwide. The firms announced the $2.1 billion deal in February.
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Aquiline Capital Partners in New York gave its entire staff the week off, Reuters reports, citing people familiar with the matter. The move is intended to recognize employees and avoid burnout from the physical and mental pressure of the Covid-19 pandemic and the frenetic pace of dealmaking. The financial services-focused firm, which has more than $6 billion in assets and over 60 employees, plans to take the same step at the end of next month, Reuters said.
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