S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Taking time
Private equity deal flow is expected to remain muted for the rest of the year as buyers and sellers favor valuation and performance certainty, UBS Group AG professionals said during a private equity and leveraged capital markets press roundtable this week.
Deal flow for assets in resilient sectors, such as healthcare and technology, continued once the effects of lockdown were able to be evaluated, but these assets are going for a premium, Simona Maellare, Global Co-Head of the Alternative Capital Group said.
Activity in sectors outside the resilient bracket is yet to return in earnest. Top of UBS's clients' minds is getting comfortable with EBITDA and business plans both on the buy side and the sell side. Given current circumstances, Maellare expects deal flow to pick up in 2021 when market participants have "at least a couple of quarters to prove that really the performance has stabilized," but that is based on the "tough assumption" there is not a second wave and subsequent lockdowns.
In order to de-risk without having to exit in an uncertain market and potentially sacrifice returns, Maellare expects to see more sponsors selling stakes in their portfolio companies.
Listing off options, Maellare said managers could sell off a minority stake in a portfolio company, transfer 50% of a current asset in a predecessor fund to its newest vehicle and sell 50% on to another sponsor, or explore general partner-led recapitalizations to carve out assets from a vehicle at the end of its life cycle and find new limited partners.
Read more from the panel here.
Diversity disclosure
Companies managed by all Black, Asian and minority ethnic and female management teams that self-reported their diversity statistics have received 4% and 1% of the £720 million worth of convertible loans approved under the U.K. government's Future Fund. Diversity statistics were released this week by the British Business Bank PLC, the state-owned development bank, which is delivering the fund.
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SPAC watch
* Gores Holdings IV Inc., a blank-check company sponsored by an affiliate of The Gores Group LLC, will take United Wholesale Mortgage LLC public in a business combination that values the mortgage lender at approximately $16.1 billion. The transaction marks the biggest merger for a special purpose acquisition company to date.
* FirstMark Capital LLC's technology-focused blank-check company FirstMark Horizon Acquisition Corp. filed for an IPO of 30.0 million units at $10.00 per unit, for estimated total gross proceeds of $300.0 million.
 An eye exam.Source: Thinkstock |
* Riverstone Holdings LLC-sponsored special-purpose acquisition company Decarbonization Plus Acquisition Corp. filed for an IPO of 30.0 million units at $10.00 apiece, totaling $300.0 million in gross proceeds.
* Pine Island Capital Partners LLC's Pine Island Acquisition Corp., which will target defense, government service and aerospace businesses, filed for an up to $300.0 million IPO. The company will offer 30 million units at $10 apiece.
* L Catterton Partners' Aspirational Consumer Lifestyle Corp. filed for an IPO of 22.5 million units at $10.00 apiece, or $225.0 million in the aggregate.
* VPC Impact Acquisition Holdings, a financial technology-focused SPAC formed by Victory Park Capital Advisors LLC, priced its IPO of 20.0 million units at $10.00 per share, for gross proceeds of $200 million.
Deals
* KKR & Co. Inc. is acquiring 1-800 Contacts Inc. from AEA Investors LP. The private equity giant is reportedly paying more than $3 billion for the contact lens retailer, people familiar with the matter told Bloomberg.
* An affiliate of KPS Capital Partners LP agreed to buy substantially the entire assets of auto-parts maker Garrett Motion Inc. for approximately $2.1 billion in a stock and asset purchase agreement.
* Compass Diversified Holdings LLC will acquire Boa Technology Inc., which makes closure systems for shoes, in a $454 million deal.
* TPG Capital LP's real estate unit, TPG Real Estate Partners Investments LLC, is purchasing Preferred Apartment Communities Inc.'s student housing portfolio for $478.7 million.
 Automotive parts.Source: Thinkstock |
Possible sales
* The Blackstone Group Inc. is nearing a deal to buy a majority stake in Precision Medicine Group Inc. from Berkshire Partners LLC and TPG Growth for about $2.3 billion, people familiar with the matter told Bloomberg News.
* Advent International Corp. is considering selling InPost SA for over €2 billion as it explores strategic options for the Polish postal locker provider, Bloomberg reported, citing people familiar with the matter.
* Veritas Capital Fund Management LLC and Elliott Management Corp. made a joint offer to acquire defense and transportation systems company Cubic Corp., which has a market value of $1.7 billion, Reuters reported, citing people familiar with the matter.
Fundraising
* Blackstone held the final close of the Blackstone Real Estate Debt Strategies IV LP fund with $8.0 billion in capital commitments.
* Sequoia Capital China is looking to raise 15 billion yuan for a new yuan-denominated fund, Reuters reported, citing people with knowledge of the matter.
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