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Longshore Capital Backs Digital Marketing Merger | Infrastructure Secondary Volume Holds Steady
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Good day Pro PE readers! The pace of deals may be slower as this year unfolds but plenty of firms, particularly those targeting small and medium-size companies, continue to find opportunities. This morning, Maria Armental covers an investment by Longshore Capital Partners in the digital marketing space where the firm is supporting the merger of Blue Wheel and Retail Bloom. Meanwhile, our secondary expert, Rod James, looks at data from Evercore Inc. that shows the secondary market for infrastructure assets actually experienced slight growth in volume in 2022, while overall secondary volume fell.
Dive in for more details on these stories and many others.
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Eitan Reshef (pictured left), chief executive of Blue Wheel, and Tom Sesti (right), co-founder of Retail Bloom and president of Blue Wheel. Credit: Jordan Morrow
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Longshore Capital Partners has backed the merger of digital marketing companies Blue Wheel and Retail Bloom to capitalize on the continuing e-commerce boom by offering companies and brands a one-stop shop, WSJ Pro Private Equity’s Maria Armental reports. Longshore’s latest investment follows a little more than a year after the Chicago-based firm’s exit of another digital marketing company, Gen3 Marketing LLC, which the firm sold to Comvest Partners.
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The market for secondhand stakes in private infrastructure funds held up well in 2022 even as the broader secondary market contracted, Rod James writes for WSJ Pro. Secondary deal volume involving infrastructure assets hit roughly $7.7 billion last year, compared with $7.6 billion in 2021, according to data compiled by the secondary advisory arm of investment bank Evercore Inc.
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$131 Billion
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The volume of dry powder available to invest in secondary transactions as of December 31, 2022, according to a report issued by investment bank Evercore.
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Salesforce recently announced layoffs and reduced its office space in some markets. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Activist investor Elliott Management Corp. has made a multibillion-dollar investment in business-software provider Salesforce Inc., Lauren Thomas and Laura Cooper report for The Wall Street Journal, citing people familiar with the matter. This adds to the pressures facing Salesforce, which cut 10% of its workforce earlier this month following a sharp slowdown in revenue growth for its fiscal third quarter from a year earlier and a plunge in its stock price. While details of the campaign couldn’t be learned, Elliott, one of the biggest and most prolific activists, often seeks board representation and pushes for companies to make operational improvements and other changes.
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Gemspring Capital Management LLC, a Connecticut-based private-equity firm, said its Gemspring Growth Solutions I fund has made a strategic minority investment to support Chicago Switchboard's acquisition of IER Electrical, according to a news release. The acquisition of IER will provide Chicago Switchboard, a maker of custom-built electrical power distribution equipment, an attractive entry point into Texas’s electrical distribution market.
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Shares of publicly traded Sumo Logic Inc. soared on Monday following a report by online news site The Information that private-equity firms had approached the data analytics software company about a possible buyout, citing a single unnamed source. The company’s share price rose more than 30% to an intraday high of $10.25, in late afternoon trading, Wallace Witkowski writes for sister publication MarketWatch. As of late Monday, Sumo Logic had not issued any public comment on the story.
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Godspeed Capital said it has acquired engineering and architectural company Morris & Associates, Engineers LLC. The firm plans to add the business to its Stratus group of companies that focus on providing engineering, architecture and consulting services, according to an emailed news release.
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Victory Park Capital Advisors in Chicago has set up a $100 million senior secured credit facility to assist Alloy Capital in originating structured finance loans in Mexico, according to a news release. Founded in 2015, Alloy is based in Mexico City, according to its website.
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Astorg and Epiris said they have divvied up Euromoney Institutional Investor PLC, which they took private late last year for around $1.91 billion. Astorg took possession of Fastmarkets and London-based Epiris took the remaining operations, which have been renamed as Delinian Ltd.
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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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Colorcon Inc. has entered into a put agreement to acquire Airnov Healthcare Packaging, from midmarket private-equity firm Arsenal Capital Partners. Airnov offers customers in the healthcare industry packaging that protects products from moisture and oxygen and was initially acquired by Arsenal in 2019.
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Midmarket firm Sterling Investment Partners has raised $934 million for Sterling Investment Partners IV, L.P, above the fund’s $900 million target, according to a news release. Sterling Partners made a significant commitment to the fund, the release stated. An investor in distribution and business-services companies, Sterling has led the investment of approximately $568 million of equity, including $250 million from SIP IV, into three SIP IV portfolio companies: Anser Advisory, Camp Facility Services, and Kendall Vegetation Services & Xylem Tree Experts.
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SLR Capital Partners LLC has raised $2.2 billion for its new direct-lending strategies, the New York firm said. The strategies—direct cash flow lending and specialty finance—were raised during the second half of 2022 and, including anticipated leverage, can deploy a total of $3.8 billion.
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Highland Europe said it has raised about €1 billion, equivalent to about $1.09 billion, for its fifth fund to back software and internet startups in Europe. The firm also said it has promoted David Blyghton to partner. He joined the firm in 2014.
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Investcorp said it has appointed Suhail Shaikh as co-head of private credit, based in New York to succeed Chris Jansen, who is taking on an advisory role ahead of retiring later this year. Mr. Shaikh, who joins fellow co-head Mike Mauer, comes aboard from Alcentra, which was acquired by Franklin Resources Inc. in November. Alcentra’s former head of U.S. private credit brings with him about $200 million of assets under management and three of his former teammates, according to a news release.
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Helios Investment Partners, one of Africa’s largest private-equity firms, has hired Elias Yazbeck as a managing director focusing on financial services and financial technology, according to a news release. Mr. Yazbeck most recently served as group director and head of growth at Veon Ltd., a Netherlands-based provider of digital connectivity and online services.
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MiddleGround Capital said it has opened an office in Europe and hired three managing directors, Alexander van der Have as head of the investment team, Anthony Denaix as head of business development and Robert Jonkers as head of operations, to lead the firm’s new Europe strategy. They report to Founding Partner John Stewart and will be joined by other professionals in the firm’s new Amsterdam office, according to a news release. The Lexington, Ky.-based firm also announced a wave of senior-level promotions.
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Swander Pace Capital said it has promoted Alex Litt and Robert Vassel to director and director of business development, respectively. Mr. Litt joined the firm in 2013 and Mr. Vassel came aboard in 2016, according to a news release.
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Bow River Capital said it has added Brian Wilson as a managing director with the firm’s real-estate team. He was previously chief executive of North Mountain Partners, a property investment firm he founded.
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Private-equity backed Travelport Worldwide Ltd. scrapped a proposal asking certain senior lenders to defer cash interest payments, WSJ Pro Bankruptcy’s Andrew Scurria and Alexander Gladstone report, citing people familiar with the matter. Facing liquidity pressure and a hefty debt load, the travel-booking platform had asked lenders to receive interest payments in-kind, meaning that instead of receiving cash, the interest would be added on to the principal amount and repaid later. The debt proposal didn’t gain traction with senior lenders that were uncomfortable with the fact that other, junior creditors weren’t asked to do the same, people familiar with the matter said. Debt discussions are expected to
continue between creditors and Travelport, backed by Elliott Management Corp. and Siris Capital Group.
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Private-equity investors are increasingly worried about "the overall direction" of fees and other fund terms as well as transparency in the industry, according to a survey by Commonfund, a Wilton, Conn.-based asset manager, with more than 150 such investors. Nearly half, or 46%, of the respondents are somewhat-to-very concerned about fees and terms, up from 41% in a similar survey last year. As for transparency, 40% are somewhat-to-very concerned, compared with 29% last year. "While illiquid private strategies have become more core holdings, investors are signaling that there is room for improvement in transparency," Ralph Money, a managing director at Commonfund, said in a blog
post.
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Goldman Sachs Group Inc.’s asset-management arm plans to cut back on investments it has made directly in an effort to improve its earnings, Reuters reports, citing Julian Salisbury, chief investment officer of asset and wealth management at the New York bank. He told the news agency that plans call for significantly reducing some $59 billion of assets over the next few years.
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Brazilian banks will face higher provisions for bad loans this year because of direct exposure to retailer Americanas SA, which has been granted protection from creditors, Credit Suisse analysts said in a note, Jeffrey Lewis reports for Dow Jones Newswires. Reuters reports that the company’s three biggest shareholders, Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles, the founders of private-equity firm 3G Capital, said on Sunday that they were unaware of accounting issues at the retailer, which has about 1,700 stores in Brazil. Americanas has said that CEO
Sergio Rial and CFO André Covre both resigned after the company detected accounting issues related to supplier accounts. The company cited a gap of 20 billion reais, equivalent to about $3.9 billion. The company’s shares lost around 97% of their value following the revelations.
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Daniel Lubetzky, who helped build KIND Snacks into a global brand, has formed Camino Partners to back entrepreneurs and help them start new businesses. The operation, formerly called Equilibria, is led by former KIND executive Elle Lanning as managing partner, with Mr. Lubetzky as founder and chairman, according to an emailed news release.
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Swedish buyout firm EQT AB’s shares have fallen 12% since the Stockholm-based firm reported full-year 2022 results, probably as the market recognises consensus estimates remain too high, Citigroup Inc. analysts said in a research note, Dominic Chopping reports for Dow Jones Newswires. Citi says it sees notable downside risk to consensus earnings estimates for the firm. EQT shares rose 3.8% to close at 235.80 kronor each in Stockholm Monday, equivalent to $23.04 each.
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