Good day. It is no secret that institutional investors have for years been trying to get more co-investment deals, but Preeti Singh today brings us news of one LP considering a rather aggressive change. Calstrs, at over $306 billion under management and one of the nation’s largest public-pension systems, is considering tripling the amount it can invest in individual deals as a way to bring down the fees it pays to asset managers. Next, Maria Armental reports healthcare firm GHO Capital Partners has raised over €2 billion, or about $2.36 billion, for its third fund. Finally, the Journal’s Miriam Gottfried, reports former Apollo Global Management head Leon Black filed a legal rebuttal to a June lawsuit from a former model accusing him of abuse. Mr. Black said the relationship was consensual and that the woman, Guzel Ganieva, had tried to extort money from him.

Now on to today's news...

California’s second-largest public pension system is weighing a loosening of its rules around co-investing, including tripling the amount it can commit to individual deals, with a goal of increasing the proportion of private-equity commitments made through the lower-cost strategy, Preeti Singh writes for WSJ Pro Private Equity. The roughly $306.7 billion California State Teachers’ Retirement System, also called Calstrs, could save millions of dollars in fees and incentive payments by expanding its co-investment program to a fifth of all private-equity commitments, the system’s private-equity investment leaders said in a recent public presentation to pension trustees.

GHO Capital Partners, a private-equity firm focused on healthcare deals, has raised more than €2 billion, equivalent to about $2.36 billion, for its third fund, Maria Armental reports for WSJ Pro Private Equity. The firm said the fund, GHO Capital III LP, is double the size of its predecessor and was collected in less than four months. GHO had aimed to raise €1.25 billion for the vehicle.

Leon Black, the billionaire co-founder of Apollo Global Management Inc., submitted a detailed response Monday to a lawsuit that accused him of forcing a woman into a yearslong abusive relationship, roundly denying the allegations and calling the complaint “a work of fiction,” Miriam Gottfried writes for The Wall Street Journal. Guzel Ganieva, a Russian immigrant and former model, sued Mr. Black on June 1, accusing him of defamation and alleging he raped and harassed her. She said he forced her to endure a “cycle of intimidation, abuse and humiliation.” Mr. Black’s response indicated they had had a consensual relationship and Ms. Ganieva began extorting him in 2015 by threatening to make their affair public.

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Platinum Equity is buying Unical Aviation Inc. and related assets, adding the City of Industry, Calif.-based provider of commercial aircraft parts and components to its portfolio. The deal includes Unical MRO, Unical 145 and Unical Aero but excludes Unical Defense Inc., which holds government contracts.

Sun Capital Partners, a private-equity firm in Boca Raton, Fla., which invests in various sectors, has acquired industrial-services company EIS Holdings LLC from O2 Investment Partners, according to an emailed news release. Founded in 2019, the Fort Worth, Texas-based company also known as Environmental Infrastructure Solutions provides abatement, decontamination, remediation and other environment- and infrastructure-related services to governments, businesses and universities. Midmarket-focused O2 acquired the company in 2018.

Thoma Bravo has received all needed approvals to proceed with a $66-a-share tender offer for Talend SA’s American depositary shares, giving the French software maker a market value of about $2.14 billion. Thoma Bravo needs to obtain tenders from owners of at least 80% of the company’s equity to close the deal.

The Falcon Private Holdings affiliate of SK Capital Partners has agreed to sell Aristech Surfaces LLC to Trinseo SA for $445 million. The Florence, Ky.-based manufacturer of acrylic solutions is expected to generate $194 million in revenue this year, Maria Armental reports for Dow Jones Newswires. SK Capital acquired Aristech in 2008 and subsequently transferred ownership to Falcon, which invests for SK Capital founders Barry Siadat and Jamshid Keynejad. They started SK Capital in 2007.

New Mountain Capital-backed Tinuiti Inc. is expanding into TV advertising marketing with the acquisition of connected TV ad-buying shop Bliss Point Media Inc., Alexandra Bruell reports for CMO Journal. Tinuiti has focused on e-commerce services, digital marketing and ad buying in search and social media.

Partners Group Holding AG has agreed to buy pharmaceutical company Pharmathen SA from BC Partners in a deal that values the company at about €1.6 billion, equivalent to roughly $1.89 billion, and in a separate deal has agreed to acquire a majority stake in wireless broadband company EOLO SPA in Italy from Searchlight Capital Partners at an enterprise value of more than €1.2 billion. Partners said the drug company provides development and manufacturing services from two facilities in Greece, specializing in advanced drug delivery technologies. The Swiss private-equity firm said it is investing in EOLO alongside company founder and Chief Executive Luca Spada.

One Equity Partners has acquired a minority interest in publicly traded electronics manufacturing services provider Cicor Technologies Ltd. The Boudry, Switzerland-based company provides contract manufacturing of circuit boards and other components from 10 production sites and has more than 2,000 employees. Cicor shares lost about 1.7% to close at 59 Swiss francs, or about $64.16, on Monday. The firm said it acquired a 29% stake in the company, valued at about 50.5 million francs based on Monday’s closing price.

Ingersoll Rand Inc., which is more than 7% owned by KKR & Co., has made takeover bids for component maker SPX Flow Inc. that have so far been rebuffed, Cara Lombardo and Miriam Gottfried  report for The Wall Street Journal, citing people familiar with the matter. The industrial-machinery company’s most recent all-cash offer valued SPX Flow in the low-$80s a share, the people said, or around $3.5 billion. SPX shares closed Friday at $62.09, giving the company a market value of about $2.6 billion.

Blackstone Group Inc. has agreed to buy a controlling stake in educational and training software and services company Simplilearn Solutions Pvt. Ltd. The business focuses on providing programming and other digital skills and works with universities and major employers in India and the U.S. The deal would be the New York firm’s first private-equity investment in a consumer technology company in Asia, according to a news release.

Midmarket specialist Court Square Capital Partners is backing video technology company Connatix Holdings Inc. with a significant growth investment, according to a news release. New York-based Connatix plans to open a London office to foster expansion in the U.K. and Europe. 

Singapore sovereign wealth investor GIC is backing electrification and green energy transformation company Qmerit Electrification LLC, backing the business alongside Lime Rock New Energy, according to a news release. Irvine, Calif.-based Qmerit specializes in electric vehicle charging. Separately, GIC has agreed to acquire a minority stake in Brazilian agricultural inputs provider Biotrop Soluções Biológicas from Aqua Capital, the majority owner of the company through its second fund.

Onex Corp. has acquired mental-health services provider Newport Healthcare, investing in the business alongside management. The Canadian private-equity firm invested in Newport through its Onex Partners V fund, which is now about 60% invested. Newport provides services for teens and young people dealing with mental-health problems.

Sands Capital and Sio Capital are joining existing investors in backing medical device maker Ancora Heart Inc. through an $80 million investment in the Santa Clara, Calif.-based company. Ancora is a medical-device maker for people with heart failure, and the new investment will be used to accelerate a clinical trial of one of the company’s treatments.

MPE Partners, or Morgenthaler Private Equity, is backing outdoor products maker Ideal Deals LLC, which operates as Ideal Aluminum. The St. Augustine, Fla.-based company makes fencing, gates and related outdoor hardware.

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Italian menswear designer Ermenegildo Zegna Group plans to combine with an Investindustrial-backed special-purpose acquisition company to go public in a deal that values the business at $3.2 billion, including debt, Eric Sylvers reports for The Wall Street Journal. Investindustrial would own an 11% stake in the business following the transaction, which would give Zegna Group a New York Stock Exchange listing.

Hedge fund manager Bill Ackman has called off his novel $4 billion purchase of about 10% of Universal Music Group through a special-purpose acquisition company, saying that the Securities and Exchange Commission wasn’t convinced the deal met the rules for such vehicles, Nick Kostov and Ben Dummett report for The Wall Street Journal. Instead, Mr. Ackman plans to do the deal through his firm Pershing Square Holdings Ltd. The SPAC deal was tied to a planned initial public offering of Universal shares by its French parent, Vivendi SE.

A blank-check company backed by Energy Capital Partners is combining with digital manufacturing company Fast Radius Inc. to bring it public in a deal that values the business at about $1.4 billion, Amrith Ramkumar reports for The Wall Street Journal. The special-purpose acquisition company, ECP Environmental Growth Opportunities Corp., raised $345 million in February.

Insurance-technology company Kin Insurance Inc. is combining with special purpose acquisition company Omnichannel Acquisition Corp. to go public in a deal that implies an enterprise value of $1.03 billion, Michael Dabaie reports for Dow Jones Newswires. The transaction will be supported by an $80 million private investment in public equity led by HSCM Bermuda and Senator Investment Group.

Gelesis Inc. is going public through a combination with a special-purpose acquisition company in a deal that values the combined business at about $1.3 billion, Dave Sebastian reports for Dow Jones Newswires. Gelesis is a biotherapeutics company focused on treating excess weight and metabolic disorders. The deal with Capstar Special Purpose Acquisition Corp. includes a $100 million private investment in public equity anchored by Pimco private funds, the Pritzker Vlock Family Office, China Medical Systems Holdings Ltd. and Gelesis founder PureTech Health. Kennedy Lewis Investment Management also plans to invest $10 million in the PIPE provided it closes on a $100 million senior secured credit facility with Gelesis.

New Mountain Capital is selling car-wash industry software supplier DRB Systems LLC to strategic buyer Vontier Corp. for about $965 million in cash. New Mountain first backed the Akron, Ohio-based company in October 2017. DRB is expected to generate $170 million in revenue this year. The deal includes a $130 million deferred tax asset.

Private-equity firm American Securities has agreed to sell Henry Co. to Carlisle Cos. for almost $1.58 billion. Hency Co. makes building-envelope systems, which control the flow of water and air in buildings. The company generated revenue of $511 million in the 12 months ended May 31, according to a news release.

Lower middle-market investor BelHealth Investment Fund has agreed to sell certain consumer marketing and distribution rights for EasyDNA held by General Genetics Corp. to strategic buyer Genetic Technologies Ltd. for $4 million in cash and stock. The business produced about $4.6 million in 2020 revenue selling at-home DNA test kits through websites.

Z Capital Partners has agreed to sell Premier Thermal Solutions LLC, a metal-processing services provider, to strategic buyer Aalberts NV, a Dutch manufacturer. Z Capital Partners first acquired the Lansing, Mich.-based company 2017, according to a news release.

Lindsay Goldberg is selling portfolio company Delta T LLC, which operates as Big Ass Fans to Madison Industries, a strategic buyer. Lindsay Goldberg initially invested in the fan maker in 2017.

H.I.G. Capital’s H.I.G. WhiteHorse credit strategy has raised about $1.65 billion for its latest fund, H.I.G. WhiteHorse Direct Lending Fund - 2020, and related vehicles, well above the firm’s target. The Miami-based firm invests from the fund in senior secured financing mainly for independently owned U.S. companies. H.I.G. Capital said it now has about $44 billion of equity capital under management.

Private-equity funds with more than $5 billion in assets raised more than twice as much capital in this year’s first half than they did in the same period of 2020, Ernst & Young Global Ltd. said in an emailed report. Funds of all sizes raised about $366 billion in the period, with 14% targeting technology-sector investments. 

American investor Michael Calvey on Monday told a Moscow court trying him on embezzlement charges that finding him innocent could trigger billions of dollars in foreign investment, helping to create thousands of new jobs, Reuters reported. The Baring Vostok founder and one of Russia’s most prominent foreign investors faces a possible six-year suspended jail sentence if found guilty. He has denied the accusations. A verdict is expected on Aug. 2. Mr. Calvey has been detained in Moscow since early 2019 on charges linked to mid-sized lender Vostochny.

Trivest Partners has promoted Mario R. Masrieh to principal. He joined the Miami firm in 2019.

Private equity had its busiest first-half ever in 2021, according to a report released Tuesday by consulting firm Ernst & Young Global Ltd. Firms announced $580 billion in deals in the first half, putting the industry on pace to easily exceed the previous best-ever first-half marks, notched in the years 2006 and 2007, when firms announced about $750 billion in investments in both periods, the report said. Exits, too, were on a record pace, rebounding strongly from the sharp decline last year as the pandemic struck.

Bridgepoint Group is expected to price its initial public offering of shares at 300 to 350 pence, equivalent to $4.13 to $4.82, per share, Reuters reported, citing the deal’s bookrunner. The price range implies a market value of as much as £2.88 billion, or about $3.97 billion.

Conviction in ESG is rising globally and no longer confined to European investors, according to new research, Mark Latham writes for sister publication Private Equity News in London. A survey of 140 limited partners around the world, conducted by U.S.-based global placement agent Capstone Partners, found that, while fund investors in North America and the Asia-Pacific region have lagged in the adoption of environmental, social and governance principles in recent years, implementation is now accelerating in all regions.

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