European megabuyout value higher; down year for healthcare technology deals

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

Buyouts with a value of at least $1 billion in Europe and the UK are trending higher in 2023 as private equity firms target high-quality assets that have maintained a relatively steady course through macroeconomic uncertainty.

While the number of megabuyouts in Europe and the UK so far in 2023 remains behind 2022's total — with just 15 $1 billion-plus deals as of Nov. 27, compared with 22 in 2022 — the aggregate value of those deals was $60.41 billion, well ahead of 2022's full-year total of $47.11 billion, according to S&P Global Market Intelligence data.

The year-over-year rise in Europe and UK megabuyouts contrasts with a broader decline in global private equity dealmaking in 2023 as private equity acquirers grappled with the impact of higher interest rates — which has made financing deals more expensive — and a forecast of slower economic growth. But the same factors that have hobbled global M&A are fueling private equity's flight to quality, said Aymen Mahmoud, a partner at McDermott Will & Emery UK LLP.

"Larger businesses are better able to withstand macroeconomic turbulence and are broadly more sustainable at times of difficulty," Mahmoud said.

Read more about 2023's $1 billion-plus buyouts in Europe and the UK.

CHART OF THE WEEK: PE healthcare technology investments track for 2nd annual decline

⮞ Private equity- and venture capital-backed healthcare technology deals in 2023 are on pace for their lowest annual totals since 2019, both by value and volume, according to S&P Global Market Intelligence data.

⮞ Private equity backers invested $9.18 billion in 370 deals globally between Jan. 1 and Nov. 23, well shy of 2022's full-year total of $14.53 billion across 658 transactions in the healthcare technology sector.

⮞ The largest deal of the year through Nov. 23 was listed private equity firm TPG Inc.'s $1.4 billion acquisition of Nextech Systems LLC, a provider of electronic medical record software to specialty clinics, in September.

TOP DEALS AND FUNDRAISING

– Blackstone Inc. acquired Power Grid Components Inc., which supplies insulators for electric utilities and municipal service providers, from Shorehill Capital LLC.

– Francisco Partners Management LP backed the combination of music publisher Hal Leonard Corp. and music applications developer Muse Group.

– Canapi Ventures raised $750 million for Canapi Ventures Fund II LP and plans to invest the money in the AI, cybersecurity, financial services and climate technology sectors.

– Intuitive Ventures secured $150 million for its second fund at closing and will invest the capital to support the development of minimally invasive care solutions.

MIDDLE-MARKET HIGHLIGHTS

– Soundcore Capital Partners LP sold its stake in water and wastewater pumping systems specialist PumpMan Inc. to Harrington Industrial Plastics LLC.

– Bridgepoint Group PLC's Bridgepoint Development Capital IV fund will acquire a 75% interest in Fera Science Ltd. from Capita PLC in a deal that values the UK-based agriculture, food and environment research group at £80 million. The Department for Environment, Food and Rural Affairs (DEFRA) will continue to own its 25% stake in Fera.

– Arkema SA completed the acquisition of a 54% stake in South Korea-based PI Advanced Materials Co. Ltd., which manufactures polyimide films used in mobile devices and electric vehicles, from Glenwood Pvt. Equity.

– Sagard SAS agreed to purchase an interest in private equity and venture capital firm Performance Equity Management LLC and expects to close the deal in the first quarter of 2024.

FOCUS ON: APPLICATION SOFTWARE

– Hudson Hill Capital Management LLC bought a significant majority stake in commerce facilitation platform Markettime LLC.

– Hashlock acquired StealthTest, a Web3 developer platform operated by Nameless. The sellers included Sound Ventures LLC, Outlier Ventures Operations Ltd., Shanghai Fenbushi Investment Management Co. Ltd., Third Prime Capital, Hidden Valley Capital LLC, VSV Management LLC, The LAO, Mechanism Capital and D64 Ventures.

– GSoft Group Inc. completed its acquisition of human resource technology platform Pingboard Inc. Silverton Partners, Capital Factory, RightVentures and Active Venture Partners LLC were among the selling investors.

For further private equity deals, read our latest In Play report, which looks at potential private equity-backed M&A, including rumored transactions, each week.

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