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Francisco, Hg Join Tech-Fund Capital Hunt | EnCap Portfolio Company Nears Bankruptcy | Tiger Global Bags $3.75 Billion
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Good day! Limited partners have showered tech-focused private-equity funds with capital despite rising valuations in the sector, particularly for enterprise software companies. And investors have plenty of funds to choose from to satisfy their hunger. This morning, we have news of three firms raising new technology funds. One of them, Tiger Global Management, has just closed on a tidy $3.75 billion, while Francisco Partners and Hg are still winding up their pitches for new funds that together target some $15 billion.
Meanwhile, Southland Royalty Co., an EnCap Investments-backed company focused on developing oil-and-gas fields in Wyoming, is preparing to file for bankruptcy protection, Luis Garcia reports.
Finally, Kobe Bryant's tragic death yesterday robbed the world not only of a tremendous athlete, an author and a philanthropist, but also of an investor who just seemed to be coming into his own. Our condolences go out to his colleagues at Bryant Stibel, the investment platform he launched in 2013 with operator and entrepreneur Jeff Stibel.
Read on for more news of the day...
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Buildings in the City of London are seen behind Waterloo Bridge in London. U.K. technology-focused firm Hg and U.S.-based Francisco Partners both are aiming to raise capital for new funds. PHOTO: PETER NICHOLLS/REUTERS
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New tech funds. The amount of money chasing technology buyouts is set to get even bigger. Francisco Partners and Hg have added their names to the list of private-equity firms seeking to boost their firepower for tech deals this year, William Louch and Laura Cooper report. Francisco Partners aims to raise more than $5 billion for its latest flagship fund, according to a person familiar with the matter. Meanwhile, London-based Hg is targeting around $10 billion across three separate funds, according to people familiar with the matter.
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Meanwhile: Tiger Global Management has closed on a $3.75 billion private-equity fund, the latest sign of investors’ continued interest in private technology companies despite worries about overheated valuations, Juliet Chung and Katie Roof report for The Wall Street Journal. The New York investment firm told its clients about the fund’s status in a letter Friday and said in an earlier communication this week the fund was oversubscribed, with more than $4 billion of demand.
EnCap-Backed energy company nears bankruptcy. Oil-and-gas company Southland Royalty Co., which has received more than $1 billion in capital commitments from EnCap Investments, is preparing to file for bankruptcy protection, Luis Garcia reports. The Fort Worth, Texas-based company could file for bankruptcy as early as this week, the people said. Falling energy prices have prompted a wave of bankruptcies in the sector.
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$51.7 Billion
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The dollar volume of private-equity deals in the technology sector in 2019, a 42% increase over 2018 levels, according to a report by PwC.
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A helicopter landing pad on a drilling rig in the North Sea off the coast of Norway. Helicopter operators have struggled with weak demand from the offshore energy sector. PHOTO: CARINA JOHANSEN/BLOOMBERG NEWS
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The merger of helicopter operators Bristow Group Inc. and Era Group Inc. marks the troubled industry’s latest response to slumping demand for offshore choppers by oil-and-gas drillers after recent bankruptcy filings by Bristow and several competing companies, Alexander Gladstone writes for WSJ Pro Bankruptcy. The combination will create the world’s largest operator of commercial helicopters, in a bid that the consolidated company will be better positioned to weather the industry slump.
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Harren Equity Partners has received regulatory clearance to back A&A Transfer Inc., according to an early antitrust filing from the Federal Trade Commission. The FTC issues such filings when the agency and the Justice Department believe a proposed transaction wouldn’t violate U.S. antitrust laws. The notice doesn’t mean the deal will close. A&A Transfer of Chantilly, Va., offers services that include commercial moving, industrial rigging, office furnishing and warehouse storage, according to its website. Charlottesville, Va.-based Harren Equity aims to back the company out of Harren Investors III LP, the filing indicates. The fund closed in 2013 with $275 million,
according to a press release issued at the time.
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Omnes Capital has invested in Danish solar-power project operator Better Energy for €30 million ($33.1 million) through the Paris-based private-equity firm’s Capenergie 4 fund. At the same time as it disclosed the deal Thursday, Omnes said it had raised €380 million for its fourth-generation fund, short of its €500 million target. The firm’s predecessor Capenergie 3 fund brought in €245 million in 2017.
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In Their Own Words With DXA's Decotelli
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Oscar Decotelli of DXA Investments/ Photo: DXA Investments.
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As the new year has unfolded, WSJ Pro Private Equity reached out to a range of private-equity professionals to get their insights on the year that just passed and the one that lies ahead. Today, Oscar Decotelli, chief executive officer at Brazilian private-equity firm DXA Investments, shares his perspective on the outlook in Latin America. Read his thoughts here.
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Shares of Sorrento Therapeutics Inc. soared 47% in premarket trading on Friday after the company said it received an offer from an unnamed private-equity firm on Thursday, Jaimy Lee reports for Dow Jones Newswires. However, shares ended Friday’s regular trading with a 1.9% gain to close at $4.27 each. The proposal is for the acquisition of a majority or all of Sorrento's shares for up to $7 per share. Sorrento said its board is currently reviewing the proposal.
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Ethos Capital’s plans to acquire the company that provides an online name registry for nonprofit groups—the dot-org online universe—has drawn criticism from activists and calls for an industry self-regulatory organization to block the deal. Cost and free-speech concerns prompted a public protest Friday outside the Los Angeles headquarters of the regulatory body for domain names, the Internet Corporation for Assigned Names and Numbers, the Associated Press reports. The organization’s leaders met at the headquarters over the weekend and plan to rule on the $1.1 billion Ethos deal by the middle of next month.
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Send us your tips, suggestions and feedback. Write to:
Ted Bunker, Laura Cooper, Chris Cumming, Luis Garcia, Laura Kreutzer, William Louch, Preeti Singh, Chitra Vemuri.
Follow us on Twitter: @wsjpe, @LCooperReports, @LHVGarcia, @LauraKreutzer, @william_louch.
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