S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
A new pathway to value creation is opening in the insurance sector and drawing the attention of private equity investors.
AI-powered automation has the potential to improve efficiency and profitability for insurance brokers and underwriters, who produce reams of paperwork. Alongside cybersecurity and data analytics, AI is a key piece of the digital transformation strategy private equity acquirers are deploying into the insurance sector, David Crofts, director of M&A at West Monroe Partners LLC, told S&P Global Market Intelligence.
Digital transformation ranked highly in a recent West Monroe survey that asked private equity and insurance executives about the key drivers of sector M&A over the next 12-24 months. The same survey indicated private equity firms have a bigger appetite for insurance sector deals than strategic acquirers over the next two years.
Private equity's value-creation strategy for brokers and underwriters previously focused on consolidating a fragmented industry, though the declining number of private equity-backed deals for insurance brokers indicates that trend is cooling. Meanwhile, the race to build an AI tool that can safely and reliably speed document processing for insurers is heating up.
Read more about private equity-backed M&A activity in the insurance sector.
CHART OF THE WEEK: Industrial automation gets big private equity boost
⮞ At $14.87 billion this year through Sept. 20, the announced value of private equity and venture capital investments in the global industrial automation sector has already doubled the annual totals recorded in 2022 and 2023, according to Market Intelligence data.
⮞ The industry's appeal to private equity includes attractive fundamentals, strong growth prospects and businesses that generate significant cash flows, Wade Aust, managing partner and chairman of financial services firm Alantra US, told Market Intelligence.
⮞ Advances in AI have the potential to inflect the industry's growth curve, Aust added.
TOP DEALS AND FUNDRAISING
– Blackstone Inc. and Vista Equity Partners Management LLC agreed to buy work management software company Smartsheet Inc. for roughly $8.4 billion in an all-cash transaction. The companies would buy Smartsheet shares at $56.50 apiece.
– KKR & Co. Inc. and GIC Pte. Ltd. tapped Bank of America, Jeffries and UBS to sell their majority stake in Metro Pacific Health in a deal valuing the Philippines-based hospital operator at $3.2 billion, Reuters reported, citing three people with knowledge of the matter. KKR and GIC own a combined 80% stake in the company.
– A consortium comprising KKR and Skip Capital Pty. Ltd.-managed Skip Essential Infrastructure Fund agreed to buy a 74.25% stake in Queensland Airports Ltd. Macquarie Asset Management Inc.'s The Infrastructure Fund, State Super and Australian Retirement Trust Pty. Ltd. are the sellers.
– EQT AB (publ)'s EQT Mid Market Europe fund agreed to divest its majority stake in Dutch boots maker Hevea BV, doing business as Dunlop Protective Footwear, to Gilde Equity Management Benelux BV.
– KKR raised $4.6 billion for KKR Ascendant Fund SCSp at final close. The vehicle will invest in middle-market businesses across various sectors in North America.
– TPG Capital LP's TPG Rise Climate LP received $1.25 billion in initial capital commitments for its strategy that focuses on climate investments in the Global South.
MIDDLE-MARKET HIGHLIGHTS
– An investor group including Kohlberg & Co. LLC agreed to sell a majority stake in fitness studio company Solidcore Holdings LLC in a deal with buyer L Catterton Partners.
– Godspeed Capital Management LP made a strategic investment in air transportation design and engineering company BNP Associates Inc.
– Thompson Street Capital Partners made a growth investment in elevator and escalator safety inspections provider ATIS Elevator Inspections LLC.
FOCUS ON: HEALTHCARE EQUIPMENT AND SUPPLIES
– Synex Medical Inc. raised $21.8 million in a series A funding round. Investors including Accomplice Management LLC and Khosla Ventures LLC participated in the round.
– Diabetic foot ulcer and amputation prevention company Orpyx Medical Technologies Inc. secured C$20 million in additional growth financing led by Perceptive Advisors LLC.
– CarrTech Corp., which manufactures filter removal of glass, secured $250,000 from Maryland Venture Fund's Social Impact Fund.
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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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