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Lime Rock Raises $230 Million Continuation Fund | BP Energy Partners Backs OnBoard Dynamics
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Good day Pro PE readers! Early yesterday, our colleagues at The Wall Street Journal reported that President Biden would nominate Jerome Powell for another term as the chairman of the Federal Reserve, a move that seems to be welcomed by a number of folks across the private-equity industry, some of whom praised Powell’s centrist view of the world. Several dealmakers we spoke with said they felt that Powell’s reappointment will demonstrate policy consistency at a time when U.S. economy continues to wrestle with lingering challenges caused by the pandemic, including supply-chain and labor-market disruptions. As a deal professional at one global firm put it, “There is enough to work through
right now without having someone come in with a different stance that I don’t think would be right for the economy.” Another senior private-equity professional added that “it will be nice to have a steady hand at the helm that’s been around for a while.”
What do you think of Powell’s reappointment, readers? What do you see as the biggest challenges he faces in his second term? Send me your thoughts.
Now onto to the news of the day...
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A pumpjack and flare in the Permian Basin, where CrownRock Minerals has investments in mineral and royalty interests across the area. PHOTO: ANGUS MORDANT/REUTERS
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Lime Rock Partners is bringing a popular secondary structure to what has been a less traveled industry for secondary dealmakers. The energy-focused firm has raised $203 million for a continuation fund to support a mineral-rights company that benefits from oil and gas production, as WSJ Pro Private Equity’s Luis Garcia reports.
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BP Energy Partners is looking to capitalize on increased efforts to curb methane emissions with a recent growth investment in Onboard Dynamics LLC, Luis Garcia writes for WSJ Pro Private Equity. BP Energy has committed $30 million to Bend, Ore.-based Onboard, a developer of portable units used in pipeline evacuations and in the refueling of natural-gas-powered vehicles, said Loren Soetenga, BP Energy’s head of investor relations. With the deal, the private-equity firm acquired a majority stake in Onboard, he said.
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$285 Billion
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The value of announced private-equity deals involving technology businesses so far this year, making up 27% of all the roughly $1 trillion of PE-backed deals revealed this year, according to Refinitiv data.
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A Telecom Italia tower in Rome. PHOTO: STEFANO RELLANDINI/REUTERS
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KKR & Co. is proposing to take private Telecom Italia SPA for €0.505 per share, giving the phone company an equity value of roughly €10.79 billion, or about $12.17 billion, and sending the shares soaring Monday, Mauro Orru reports for Dow Jones Newswires. The Rome-based company said late Sunday that its directors met to consider the proposal, which it described as friendly and representing a 47% premium to Friday's closing price, Pierre Briançon reports for sister publication Barron’s. But KKR could face resistance from
Vivendi SE, the media conglomerate steered by the family of French billionaire Vincent Bollore, as it has amassed a nearly 24% stake in the Italian utility and former government-owned monopoly. Reuters reported that Telecom Italia has about €22.5 billion of net debt, indicating a transaction value of roughly $37.56 billion.
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CVC Capital Partners and HPS Investment Partners have agreed to back Authentic Brands Group Inc. in a roughly $3.5 billion deal that gives the holding company an enterprise value of $12.7 billion, Matt Grossman and Miriam Gottfried report for The Wall Street Journal, citing people familiar with the matter. The firms join existing investors, including BlackRock Inc., General Atlantic and Leonard Green & Partners in backing the company, whose brands include Reebok, Spyder, Thomasville and Sports Illustrated. The deal also means the company will put off an initial public offering. An IPO may now be held in 2023 or 2024.
CVC is investing through its eighth flagship fund.
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Apollo Global Management Inc. has joined with an EnCap Investments fund to acquire a half interest in energy-storage company Broad Reach Power LLC from EnCap and co-investors Yorktown Partners and Mercuria Energy, according to a news release. The remaining half continues to be owned by EnCap and its co-investment partners. Apollo, EnCap Energy Transition Fund I and the EnCap investors have also agreed to invest $400 million to expand the Houston-based company.
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New York hedge fund and U.S. newspaper consolidator Alden Global Capital LLC has made a proposal to take Lee Enterprises Inc. private in a deal that values the company at around $141 million, Adriano Marchese writes for the Wall Street Journal. On Monday, Alden Global proposed to purchase the media company, which has news operations in 77 U.S. markets, for $24 a share in cash. Lee’s shares closed Friday at $18.49 and were up 46% so far for the year. On Monday, shares in Lee jumped 24% to $22.84.
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KKR & Co. is joining with U.K. real-estate investment manager Apache Capital to form a joint venture that aims to develop multi-family residential housing, starting with a £610 million, or roughly $820.3 million, commitment. The venture has identified development sites in Birmingham, Brighton and London, among other U.K. cities. Plans call for the construction of more than 4,000 rental apartments to be managed by Moda Living, according to a news release. KKR is investing through its $2.2 billion KKR Real Estate Europe Partners Europe II fund.
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Apollo Global Management Inc. may be considering an acquisition of U.K. retailer Marks & Spencer Group PLC, which climbed in London trading Monday following weekend news reports concerning Apollo’s interest, Philip Waller reports for Dow Jones Newswires. The shares rose almost 2% Monday to close at 245.5 pence in London.
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CVC Capital Partners acquisition target Intertrust NV, a Dutch provider of investment-administration services, said it has received multiple expressions of interest from bidders interested in acquiring the company since it announced that it had agreed to exclusive discussions with the U.K. buyout firm last week. CVC offered €18 per share, or about $20.30 a share, which would give the company a market value of about €1.63 billion, and indicated last week that it would combine Intertrust with professional services portfolio company TMF Group BV. Intertrust said alternative bidders suggested they would offer as much as €22 per share. The shares rose about 4.2% Monday to close
at €17.50 each in Euronext Amsterdam trading.
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Specialist firm WindRose Health Investors has acquired equipment benefit management company StateServ Medical LLC, investing alongside management and buying a stake held by Blue Wolf Capital Partners. The Mesa, Ariz.-based business works with providers in the post-acute care segment through a network of 34 service locations. Blue Wolf first backed the company in August 2017.
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Food-chain-focused investment firm Paine Schwartz Partners has agreed to acquire a 50% interest in biotechnology company Hendrix Genetics BV, investing through its Paine Schwartz Food Chain Fund V alongside co-investors. The deal provides an exit for NPM Capital, which first backed the Boxmeer, Netherlands, company in 2015. Hendrix has more than 3,500 employees and develops products based on a variety of animals, including turkeys, pigs, fish and shrimp.
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Sentinel Capital Partners is investing in cold-weather and protective apparel maker RefrigiWear Inc., backing the company alongside its founding families, according to a news release. The clothing maker based in Dahlonega, Ga., also sells writing instruments, batteries and thermometers for use in sub-freezing environments.
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Littlejohn & Co. has acquired American Health Staffing Group, investing alongside management of the Edmond, Okla.-based personnel-services company, according to a press release.
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Middle-market investor Great Range Capital has acquired wooden pallet and box maker Realm Inc. The Newton, Iowa-based company provides custom-made crates as well as wood mulch.
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Comvest Partners is backing online retailer Renovation Brands LLC, investing in the Florence, Ala.-based company alongside management and existing investor Digital Fuel Capital.
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The Ontario Municipal Employees Retirement System has agreed to invest $150 million in publicly traded BioCryst Pharmaceuticals Inc. to acquire a royalty stream from sales of Orladeyo, a drug that is also called berotralstat and is used to treat hereditary angioedema, starting in late 2023. Omers is investing in the Durham, N.C.-based company through its capital-markets arm.
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Certares Management LLC, a global investment firm focused on travel, tourism and hospitality deals, has made a strategic investment in Avoya Travel, a software and services platform focused on the travel and tourism industry.
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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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A 2018 photo of Athenahealth's logo/Photo: Jenny Kan, Associated Press
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Bain Capital and Hellman & Friedman's $17 billion proposed deal for healthcare-technology company Athenahealth Inc. is set to provide a windfall for the company’s current private-equity backer Veritas Capital. A person familiar with the situation told WSJ Pro Private Equity’s Laura Cooper that the deal would produce a return multiple of approximately 10-times the firm’s invested capital. Veritas and Evergreen Coast Capital acquired the company through
a take-private deal in February 2019 for $5.7 billion. The company was combined with Veritas-backed Virence Health, the former value-based care assets of GE Healthcare.
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Carlyle Group Inc. has agreed to sell customer-experience technology company ProKarma Inc., operating as PK, to strategic buyer Concentrix Corp., which said it is investing about $1.6 billion in the deal. ProKarma is expected to generate $85 million of adjusted pretax earnings on $530 million of revenue in its first full year under Concentrix ownership, according to a news release. Carlyle initially backed the design-engineering company in 2016.
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Providence Equity Partners is leading a secondary stock sale of about 9.2 million shares of publicly traded digital-media metrics company DoubleVerify Holdings Inc. at $31.25 each, including 1.2 million shares added as an underwriters overallotment, according to a news release. Providence is selling more than 7.8 million shares held by its Providence VII U.S. Holdings LP vehicle. Other sellers include executives of the company, a securities filing shows. The shares closed Monday at $32.74 each.
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L Squared Capital Partners is selling made-to-order cutting device maker GWS Tool Intermediate Holdings LLC to strategic buyer Sandvik AB in Stockholm. Tavares, Fla.-based GWS specializes in round tools used in manufacturing and is expected to generate 875 million Swedish kronor, or about $97.8 million, in 2021 revenue. L Squared invested in the company from its second flagship fund in September 2019.
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Blackstone Inc. has closed its latest vehicle to invest in private-equity firms, wrapping up marketing for the fund with $5.6 billion in commitments. The New York firm plans to make minority investments in fund sponsors through its Blackstone Strategic Capital Holdings II. So far this year, the firm has invested in Great Hill Partners, GTCR and Sentinel Capital Partners through the GP stakes strategy, which is led by Mustafa M. Siddiqui and Mike Nash. The firm had a $4 billion target for the new fund, WSJ Pro Private Equity reported last year. The first GP stake vehicle closed on a reported $3.3 billion in 2015.
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China private-equity firm Trustbridge Partners has collected more than $1.64 billion so far for Trustbridge Partners VII LP, a private-equity fund that has been in the market since at least December, a securities filing shows. The Shanghai-based firm was founded by Li Shujun. Mercury Capital Advisors served as placement agent for the fund, the filing indicates.
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Richard Lam. PHOTO: CHRIS McCANN
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Richard Lam, who until recently served as global head of fund relationships for a venture- and growth-focused platform of the Ontario Teachers’ Pension Plan, is joining Race Capital as a partner. San Francisco-based Race Capital, an early-stage venture-capital fund, invests in data, enterprise, infrastructure and fintech sectors. According to Mr. Lam, who will continue to be based out of Toronto, the firm will expand its operations in the country. “There is a compelling opportunity to really help these companies grow, scale and for Race to really build that long-lasting franchise in the venture ecosystem,” Mr. Lam said.
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MSD Partners, which grew out of Michael Dell’s family office, has hired Carlos Soto and Federico Schiffrin as managing directors, according to a press release. Mr. Soto, who joins from Comvest Partners, is head of business development for MSD’s private capital group. Mr. Schiffrin, who comes aboard from Unigestion, mainly supports capital formation and product strategy in the firm’s strategic-partners group.
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Alternative investment firm Castlelake said it is expanding its lending team with at least five new professionals. They include Wilhelm Steinmark as European head of aviation lending on the direct structured credit and capital markets team and Chirs Turner as a director on the team. The firm also added Fouad Onbargi as a managing director to the direct structured credit team and Brian Banschick and Ricardo De Armas as directors to that team. Castlelake established the lending team, which is headed by Armin Rothauser, in November 2020 to address a lack of financing capacity in the aviation sector,
according to a press release.
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Meketa Investment Group has promoted Hannah Webber to director of consulting services, according to an emailed news release. She joined the firm in 2018.
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Bigger private-market bets, inflation fears and a surge of retirees are putting public retirement funds at risk of a cash crunch that would force them to sell assets at losses to pay pension checks, Heather Gillers writes for The Wall Street Journal. Cash allocations have dropped to a seven-year low at the funds that manage more than $4.5 trillion in retirement savings for America's teachers, police and firefighters. Public pension funds, which have increasingly turned to illiquid private markets to drive up returns, are now aiming to keep about 0.8% of their holdings in cash, according to data from the Boston College Center for Retirement Research.
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U.S. life insurers are backing Americans’ policies with bigger slugs of riskier, higher-yielding investments, Leslie Scism writes for The Wall Street Journal. Holdings of real estate, below-investment-grade bonds, mortgage loans, private equity, hedge funds, limited partnerships and privately placed debt increased 39% from 2015 to 2020, outpacing the 26% increase in total cash and invested assets, according to a new report by Moody’s Investors Service. As a result, these so-called illiquid assets represented about 35% of insurers’ $4.04 trillion in investments as of Dec. 31, 2020, up from 32% out of $3.2 trillion in 2015.
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