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Private Capital Homes In on Defense | NEA's Sonsini Launches New Firm
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Welcome back, readers! In recent years, the war between Russia and Ukraine, and more recently the one in Gaza, have drawn renewed attention to military readiness here in the U.S. Government agencies like the Defense Department want private investors to play a role in helping to finance that readiness.
In this morning’s news, Maria Armental looks at one U.S. government initiative aimed at attracting more private capital to companies focused on critical defense manufacturing and technologies. Meanwhile, our WSJ Pro Venture Capital colleague has news of a new venture firm co-founded by Pete Sonsini, former general partner at New Enterprise Associates.
Read on for more details on these stories and many more...
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Fathom uses a variety of 3-D printing techniques to quickly make prototypes and complex manufacturing parts for its customers. PHOTO: FATHOM
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Stifel Financial’s North Atlantic Capital will channel financing to help small companies invest in 3-D printing through a government-supported program aimed at tackling supply-chain challenges and accelerating military production, Maria Armental reports for WSJ Pro. Stifel North Atlantic and the Applied Science and Technology Research Organization of America, a nonprofit research institute known as Astro America, got approval to raise a private-equity fund under the Small Business Investment Company Critical Technologies initiative, the first of what are expected to be multiple participants in the program. The Department of Defense and the Small Business Administration launched the
initiative to attract private capital to technologies, such as additive manufacturing or 3-D printing, deemed critical to defense needs.
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Venture investor Pete Sonsini, whose highest-profile deal involved business software company Databricks, has teamed up with a pair of entrepreneurs in a new venture shop, Laude Ventures Management, Yuliya Chernova reports for WSJ Pro Venture Capital. Joining Sonsini at Laude, which is raising its first fund, are Andy Konwinski, co-founder of Databricks and of Perplexity AI, as well as Andrew Krioukov, co-founder of startups Comfy and Antimatter, according to a pitch-deck slide seen by WSJ Pro, as well as people familiar with the situation. Sonsini, who stepped down from his role as general partner at venture firm New
Enterprise Associates last year, declined to comment. Konwinski and Krioukov didn’t respond to requests for comment.
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$14.7 Trillion
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The total AUM controlled by private-markets firms worldwide, reflecting nearly a 13% annualized growth rate since 2012, according to research provider PitchBook Data.
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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. Secondary investors can access the survey here.
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DigitalBridge Group is partnering with Crestview Partners to buy WideOpenWest. PHOTO: RAFAEL HENRIQUE, ZUMA PRESS
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Crestview Partners said it is teaming with infrastructure-focused DigitalBridge Group in offering to take private broadband services provider WideOpenWest at an equity value of about $400 million, Colin Kellaher reports for Dow Jones Newswires. New York-based Crestview already has a roughly 38% stake in the company and said it plans to roll that holding into the buyout, while Boca Raton, Fla.-based DigitalBridge would cash to the table. The bidders are offering $4.80 per share, representing a nearly 27% premium to Thursday's closing price for the Englewood, Colo., company. WideOpenWest shares jumped 28% to close at $4.86 in New York trading Friday.
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EQT AB has agreed to acquire publicly traded digital consultancy Perficient in an all-cash deal that values the company at around $3 billion. EQT plans to acquire the St. Louis-based company for $76 a share out of its BPEA Private Equity Fund VIII fund, which closed in 2022 with $11.2 billion.
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The Canada Pension Plan Investment Board in Toronto said it is backing aerospace parts and repair company Ontic with a $450 million growth investment, joining existing investor CVC Capital Partners. The U.K. company manufactures, assembles and services thousands of aircraft components for plane makers and aircraft operators. CPP Investments said it made the commitment through its direct private equity strategy.
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Oaktree Capital Management in Los Angeles is providing $375 million in unsecured debt to publicly traded Telephone & Data Systems, which is expanding its broadband services.The Brookfield-controlled lender said the five-year loan includes $300 million up front and $75 million that the Chicago-based company can draw from over the coming 18 months.
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Lone Star Funds in Dallas said it has acquired industrial engineering services provider and components distributor Eriks. The Dutch company specializes in sealants, instrumentation, valves, power transmission and conveying systems as well as other products and machinery, serving customers from more than 200 locations in 12 countries.
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European buyout firm EQT AB said it is acquiring identity and access management software company WSO2, investing through its BPEA Fund VIII, managed by EQT Private Capital Asia. The Santa Clara, Calif.-based company’s applications are used by business, government and education organizations to convert legacy systems to digital technology. Goldman Sachs Group’s asset management arm’s private credit operation led a $90 million growth investment in the business in late 2021.
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Carica Sustainable Investments, a family office fund connected with former Blackstone executive Hamilton “Tony” James, said it is making a growth investment in the SemiLink Materials business of computer chip-making supplies provider Advanced Material Solutions, which also serves producers of solar cells and battery storage systems. Advanced Material is based in Missoula, Mont., and specializes in making electronic silicon gasses as well as vapor deposition equipment used in manufacturing.
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Wynnchurch Capital in Rosemont, Ill., said it has acquired hydrochloric acid distributor Reagent Chemical & Research, investing alongside management of the business. Ringoes, N.J.-based Reagent supplies the industrial acid to customers across North America.
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Buyout shop L2 Capital Partners in Devon, Pa., said it has acquired barbecue sauce and flavorings maker Kosmos Q and appointed Scott Jensen, a Stubb’s BBQ co-founder and former leader, as chief executive. The firm said it is investing in the Oklahoma City, Okla., company with financing from Oxer Capital Partners and Salem Investment Partners.
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Industrial Opportunity Partners in Evanston, Ill., and Goldman Sachs Group’s asset management arm are investing $114 million in packaging company Transcendia Holdings to help recapitalize the balance sheet of the Franklin Park, Ill.-based business. The deal will make IOP the majority owner of Transcendia, which produces engineered films used in end markets from healthcare to food and beverage and printing. Existing backer Goldman is retaining a significant minority stake. The credit investment arm of General Atlantic is financing the deal through a new first lien credit facility, eliminating more than $200 million of debt from the company’s balance
sheet.
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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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Uniti Group has agreed to acquire broadband services provider Windstream. PHOTO: WINDSTREAM HOLDINGS
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Elliott Investment Management-backed broadband services provider Windstream Holdings II has agreed to be acquired by Uniti Group, a publicly traded real estate investment trust that owns the fiber-optic and wireless infrastructure that carries Windstream’s services. The cash and stock deal for Windstream is valued at about $1 billion and would reunite the two companies, which split almost a decade earlier. Elliot gained control of Windstream through a bankruptcy reorganization in 2020 that wiped
out about $4 billion in debt. Elliott and other creditors agreed to supply $750 million in equity financing as Windstream emerged from court protection. Both Uniti and Windstream are based in Little Rock, Ark. Elliott, which said it also owns Uniti equity and debt, plans to rollover its investment into the combined business, which would have revenue of about $4.4 billion. Uniti shares plunged 26% to close at $4.44 each in New York following news of the deal.
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Littlejohn & Co. is selling staffing services provider Motion Recruitment Partners to strategic buyer Kelly Services for as much as $485 million, Colin Kellaher reports for Dow Jones Newswires. Greenwich, Conn.-based Littlejohn expects to receive $425 million in cash at closing and as much as $60 million in earnouts. The firm first invested in the Boston-based company in 2018.
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Lower midmarket focused Palm Beach Capital said it has wrapped up fundraising for its Palm Beach Capital Fund VI with more than $350 million, surpassing a $275 million target for the vehicle. The West Palm Beach, Fla.-based firm said it as well as firm employees made significant capital contributions to the fund alongside institutional investors. The firm generally backs companies with adjusted pre-tax earnings of $10 million to $30 million.
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Macquarie Group in Sydney expects to offload more green assets after a slower period as market appetite for renewables remains strong, Alice Uribe reports for Dow Jones Newswires. Australia's largest investment bank and asset manager had a relatively quiet fiscal 2024 for its green asset realizations compared with previous years. But Chief Executive Shemara Wikramanayake said this was likely to change in line with its strategy to make moves when it's most fruitful for a particular asset. "It wasn't timely to sell them" during the just-ended period, Wikramanayake said of fiscal 2024. For fiscal 2025, Macquarie has assets it intends to realize, she said, noting that there is appetite in the market.
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Pinegrove Capital Partners, an entity backed by Sequoia Heritage and Brookfield Asset Management, is acquiring SVB Capital, the former fund-of-funds arm of Silicon Valley Bank, for $340 million in cash, subject to certain adjustments. SVB Capital manages around $9.8 billion of assets on behalf of third-party investors, according to a document filed in bankruptcy court in New York.
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