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Vote-Counting Machines Stir Concern | Vista Downplays Sheth Role | EMH Locks Up $768 Million | Portfolio Advisors Adds Three Managing Directors
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Good morning. As the U.S. election nears, the coronavirus pandemic is resurging, markets are skidding and families are pondering a Thanksgiving Day like no other. But we have an unusual amount of news from our own court to offer today, so let's get straight to it.
Our Chris Cumming highlights how private equity's role in producing vote-counting machines has raised concerns in Washington. At Vista Equity Partners, Chief Executive Robert Smith is reassuring investors that recent organizational changes have made the firm less reliant on key executives amid concerns President Brian Sheth may be getting ready to leave, our Preeti Singh reports. Also, WSJ Pro's Isaac Taylor reports on the fundraising success of Munich firm EMH Partners despite the pandemic, and Laura Kreutzer has news of three new senior executives buying into Portfolio Advisors. All that and more await, so please jump in...
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Brian Sheth, Vista Equity president and co-founder, speaks during last year’s Milken Institute conference. PHOTO: PATRICK T. FALLON / BLOOMBERG NEWS
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Vista Equity Partners is playing down how a potential departure of co-founder and President Brian Sheth would affect the firm, even as it grapples with fallout from the recent $140 million settlement of a tax probe by Robert Smith, Vista’s chairman, chief executive and other co-founder, Preeti Singh reports for WSJ Pro Private Equity. In conversations and calls with investors in the wake of the nonprosecution agreement between Mr. Smith and the Justice Department, which stemmed from a yearslong criminal investigation, the CEO has sought to play down Mr. Sheth’s role in the firm’s structure, according to people familiar with the matter. But they say investor concern focuses
on the day-to-day roles of Vista’s co-founders.
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Leveraged-buyout firms are playing a key role in the 2020 elections: Companies they own are counting the flood of mail-in ballots, and that isn’t sitting well with some lawmakers, Chris Cumming writes for WSJ Pro Private Equity. Two private equity-owned companies dominate the market for high-speed ballot scanners and other voting equipment. Lawmakers have raised questions about the lack of transparency and competition in the industry, and more broadly over the role of private-equity firms in elections.
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EMH Partners, a growth-equity firm focused on investments in Germany, Austria and Switzerland, has closed its second fund at the fund’s €650 million ($768.1 million) hard cap, as WSJ Pro’s Isaac Taylor reports. Although the coronavirus pandemic slowed the Munich firm’s fundraising progress somewhat, it did not stop EMH from attracting new investors, including limited partners from North America.
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Portfolio Advisors has added three new senior hires to its management team as part of the Darien, Conn.-based fund-of-fund manager’s transition to its next generation of leaders, Laura Kreutzer reports for WSJ Pro Private Equity. Scott Higbee, Stephen Sloan and Brooks Lindberg have joined the firm as managing directors and have acquired stakes in the business as well. They've also joined the firm’s management committee alongside Managing Directors Brian Murphy, Adam Clemens and William Indelicato.
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Midmarket companies are facing a highly uncertain outlook, with the world economy undergoing massive disruption as a result of the coronavirus pandemic, the potential of marked policy changes after the U.S. elections, and escalating trade and political disputes with China. Join WSJ Pro Private Equity for a free virtual event on The Path Forward for the Middle Market on Nov. 16 from 11 a.m. to noon Eastern Time. Register to participate here.
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$161.2 Billion
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The amount invested in U.S. companies by buyout firms during the first nine months of this year, including $59.4 billion in the third quarter, according to Refinitiv data
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A Homeland Security Department worker is among those in government that try to detect and defeat hacker threats. PHOTO: LARRY DOWNING / REUTERS
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Francisco Partners has agreed to acquire the Forcepoint cybersecurity business of Raytheon Technologies Corp. The Austin, Texas-based company provides security systems designed to prevent insider breaches as well as to protect databases, networks and other systems from hackers and is used by customers in 150 countries, according to a news release.
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Cerberus Capital Management has purchased National Dentex Labs, making a growth investment in the provider of services to dentists and related organizations based in Palm Beach Gardens, Fla. The company operates 30 dental labs across the U.S.
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Highland Capital Management and Coatue Management led a $310 million growth investment in molecular research and drug development company Caris Life Sciences Inc., of Irving, Texas. Other investors included Sixth Street Partners, which also provided $75 million in fresh debt, building on an earlier $150 million in structured debt financing.
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Stone Point Capital has joined GreyLion Capital as an investor in home building management software company Hyphen Solutions LLC. A new growth investment from the two firms is expected to help the Dallas-based maker of cloud-based construction management systems develop an integrated payments application, according to a news release. GreyLion initially backed the company in 2016.
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Cohere Capital has invested in digital media advertising marketplace provider Sonobi Inc., based in Winter Park, Fla. The growth investment from the Boston firm is expected to finance product development and acquisitions.
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Recurring Capital Partners, a debt firm focused on software providers and other technology-driven companies, has backed AssureSign, a software provider focused on electronic document management.
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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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Lion Capital is backing a blank-check company that has filed to raise $350 million from an initial public share offering, a regulatory filing shows. The Los Angeles-based special purpose acquisition company, called Leo Holdings Corp. II, is led by Lion Capital co-founder Lyndon Lea as chief executive and president. Ed Forst, Lion Capital’s chairman, is chairman of the SPAC as well. In the filing, the company didn’t specify a target sector where it aims to find a private business to acquire and take public.
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A blank-check company backed by Fortress Investment Group has set a shareholder meeting on Nov. 13 to consider its proposed acquisition of rare-earth element mining company MP Materials, which supplies makers of electric vehicles, wind turbines and defense industries. The deal announced in July gives the company an equity value of about $1.5 billion. Fortress Value Acquisition Corp. is led by Andrew McKnight, a Fortress Investment managing partner in its credit funds business and the firm’s co-head of corporate debt and securities, as well as other top Fortress Investment executives. The special purpose acquisition company raised about $345 million through an initial
public offering in May.
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In a move that targets the growing U.S. sports-wagering industry, U.K. betting-data firm Genius Sports Group Ltd. has struck a $1.5 billion deal to start trading on the New York Stock Exchange by merging with dMY Technology Group Inc. II, a U.S. blank-check company, Katherine Sayre and Ben Dummett report for Dow Jones Newswires, citing people familiar with the matter. London-based Genius Sports collects and distributes in-game data that forms the backbone for sports betting. The company works with organizations such as soccer's English Premier League and golf’s PGA Tour.
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Providence Equity Partners-backed Topgolf Entertainment Group is nearing a buyout deal with Callaway Golf Co., which already owns a stake in the operator of driving ranges, Cara Lombardo reports for The Wall Street Journal, citing people familiar with the matter. A deal would bring a company known for its clubs and golf balls into the fast-growing sports-entertainment business. The companies are discussing a deal that would value Topgolf at more than $2 billion, the people said. An agreement could be finalized this week, assuming the talks don’t fall apart. Callaway has a market value of about $2 billion and already owns a roughly 14% stake in Dallas-based Topgolf.
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Brookfield Asset Management Inc. has closed its first European “core-plus” real estate fund with €1.14 billion (or roughly $1.35 billion) in commitments, the Toronto-based firm said Tuesday. Brookfield said it had a goal of raising €1 billion for Brookfield European Real Estate Partnership, one of its perpetual private-equity investment strategies, and has already invested more than €50 million from it to acquire an office building in Paris. In announcing a first close of the fund in July, Brookfield said it has collected €725 million for the strategy.
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Midmarket focused fund-of-funds manager Constitution Capital Partners has brought on Michael Doppelt as a managing director for investor relations. He previously led fundraising at midmarket-focused firms Lightyear Capital and Irving Place Capital.
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FlowStone Partners has hired Mark Phillip as a managing director to lead business development and investor relations for the family-office focused adviser that specializes in providing access to private equity through secondary, primary and co-investment transactions. Previously, Mr. Phillip was a principal with MatlinPatterson Asset Management.
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Defense and aerospace-focused Liberty Hall Capital Partners has named Michael J. Warren as a partner in the Charleston, S.C., firm. He joins from airframe components supplier Omada International, where he was chief executive, and previously worked with Liberty Hall executives as a principal with Oak Hill Capital Management.
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Concord Health Partners has promoted Timothy Leahy to partner. He is also a member of the health care-focused firm’s investment committee. Mr. Leahy joined the Summit, N.J., firm last year from buyout firm BelHealth Investment Partners.
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Ares Management Corp.’s business development company, Los Angeles-based Ares Capital Corp. reported $441 million in net income, or $1.04 a share, for the third quarter, more than double its $175 million, 41 cents per share results from the same period in 2019. Total assets increased 3.4% from the year-earlier period to $14.95 billion as both new commitments and exits by the lender shrank dramatically from the year-ago quarter. The company is the largest business development company in the U.S.
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Advanced Micro Devices Inc. plans to buy rival chip maker Xilinx Inc. in a $35 billion all-stock deal, adding momentum to a consolidation of the semiconductor industry that has only accelerated during the pandemic, Asa Fitch writes in The Wall Street Journal. AMD and Xilinx on Tuesday said the companies reached a deal that would significantly expand their product range and markets and deliver a financial boost immediately on closing.
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Fallout from missed rent payments is threatening a swath of the U.S. population, as the expiration of eviction bans draws near, Will Parker writes in The Wall Street Journal. A large number of renters have been unable to pay some or even all of their rent since March, when the pandemic temporarily shut down most businesses. Many businesses remain closed or only partially open, pushing renters into unemployment and draining their savings. The effects are bound to wash over the broader economy.
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