Note: The Private Equity Pulse will not publish Friday, April 15. Your next issue will be Friday, April 22.
S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Private equity firms have refined the way they interact with advisers after the deal boom in 2021 tested the industry’s capacity.
Professional service firms were hit by staff shortages due to absences and turnover just as private equity activity ramped up following a coronavirus-induced pause in mid-2020. Private equity transaction volume was up 40% year over year in 2021, with 24,722 deals worth an aggregate $1.2 trillion announced globally, according to S&P Global Market Intelligence data pulled in January.
Managers leaned on their personal relationships with advisers to get their deals staffed, calling up favors as advisers prioritized work for existing, long-term clients.
Another key was identifying deals in pipelines that managers “really wanted to do early,” bringing commercial due diligence providers on and starting to spend the money to do that, Tom Salmon of IK Partners said.
One law firm partner said a client flagged a deal, told the firm to hold off on committing a team and got back in touch when the deal kicked off aggressively. “If we didn’t have the relationship with the client to be able to have that [conversation] in the first place, and then for them to be direct and honest saying, actually, this is now going to kick off, it would be more challenging. But I think because we’re able to have those conversations, it helped,” said the partner, who advises large-cap clients.
Although macroeconomic headwinds are expected to slow deal flow on last year’s figures, levels are expected to remain strong as private equity has large volumes of dry powder to spend.
The law firm partner said there is so much opportunity in private equity that increasing the number of partners and associates dedicated to the industry is something it is doing on an ongoing basis, not just “for the crazy times.”
Read more here.
CHART OF THE WEEK: Cryptocurrency demand drives blockchain investment
โฎ After raising a record $18.4 billion in 2021, blockchain businesses have attracted a further $5.03 billion in 2022 as of March 24, driven in large part by the demand for cryptocurrency, according to S&P Global Market Intelligence data.
โฎ The largest blockchain funding round announced globally since 2010 was for FTX Trading Ltd., which raised $900.0 million in series B financing from investors including Insight Partners and Thoma Bravo LP in July 2021.
โฎ Blackstone Inc. and its fund affiliates closed the largest blockchain deal to date, the buyout of India-based Mphasis Ltd. in August 2021.
FUNDRAISING AND DEALS
* The hybrid value strategy of Apollo Global Management Inc. raised approximately $4.6 billion for Apollo Hybrid Value Fund II LP at final close, The Wall Street Journal reported.
Separately, Apollo Global and Mitsubishi UFJ Financial Group Inc. will invest $775 million in Israel-based Liquidity Group, an artificial intelligence platform for credit decisions, Dow Jones Newswires’ MarketWatch reported. Apollo, Mitsubishi UFJ and Spark Capital Partners LLC also injected a further $50 million into Liquidity Group in the form of a SAFE note, bringing the latter’s assets under management to more than $2 billion.
* Brookfield Business Partners LP and its institutional partners are buying automotive retail technology company CDK Global in an approximately $8.3 billion deal that could close in the third quarter.
* Thoma Bravo LP amassed $3.3 billion for Thoma Bravo Credit Fund II, its largest credit fund closure to date. The firm also closed its strategic growth investment in User Zoom Inc., valuing the digital user experience insights platform at $800 million.
* Advent International Corp. purchased European payment solutions provider Mangopay SA from Crรฉdit Mutuel Arkรฉa.
ELSEWHERE IN THE INDUSTRY
* Blue Wolf Capital Partners LLC closed its Blue Wolf Capital Fund V LP at its hard cap of $1.1 billion.
* Franklin Resources Inc., also known as Franklin Templeton, acquired Lexington Partners LP in a deal that closed April 1.
* Actis LLP sold Echoenergia, a Brazilian independent renewable energy platform, to Equatorial Energia SA.
* Affiliates of Lone Star completed the acquisitions of Japanese structural building material company Senqcia Corp. and process solutions provider SPX FLOW Inc. in two separate transactions.
FOCUS ON: HEALTHCARE
* Funds managed by Stone Point Capital LLC are purchasing Tivity Health Inc. in a deal valued at $2 billion. The acquisition is expected to close in or before the third quarter.
* Audax Management Company LLC beefed up its investment in Aspen Surgical Products Inc. via a single-asset continuation fund. Limited partners anchored by funds managed by Goldman Sachs Asset Management LP and Hamilton Lane Inc. will support the fund.
* York Private Equity, through its York Special Opportunities Fund III LP, invested in Healthcare Linen Services Group.
