S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Although there were signs earlier in the year that macroeconomic turbulence could prime the industrials sector for dealmaking, private equity and venture capital-backed transactions in the space are poised for a significant year-over-year drop at the end of 2023.
Speaking at a conference in June, Apollo Global Management Inc. Director Scott Kleinman suggested the economic "storm clouds" gathering at midyear would boost take-private activity in at-risk sectors, including industrials.
"Those CEOs see the same storm clouds I'm talking about and are thinking about this is not a terrible time to be going private and get out of the public eye, do some of the things they wanted to do and ride out the storm for the next few years in private," Kleinman said.
He was right about private equity-backed take-privates, which are tracking for their highest total in at least 16 years. By the time Kleinman shared his outlook in June, Apollo had already partnered with Abu Dhabi Investment Authority on the $8.16 billion deal to take Univar Solutions Inc. private, the largest private equity-backed industrials transaction of the year so far.
But there may not have been many opportunities like the Univar deal in 2023, which is on track to record the lowest aggregate global investment in industrials by private equity and venture capital firms since 2018. The $66.41 billion aggregate transaction value recorded in the sector for the year through Nov. 16 is less than half of the way to the 2022 full-year total of $153.16 billion, according to S&P Global Market Intelligence data.
Read more about private equity transactions in the industrials sector, including the top deals of the year through Nov. 16.
CHART OF THE WEEK: PE investments in publishing step up in 2023
⮞ Private equity-backed investments in the publishing industry are set for a significant year-over-year jump, with an aggregate transaction value of $2.42 billion recorded between Jan. 1 and Nov. 23, compared with just $5.4 million of deals in all of 2022.
⮞ North America dominated deal activity, with half the 26 deals recorded globally through Nov. 23 linked to the US or Canada.
⮞ The largest deal of the year through Nov. 23 was Kohlberg Kravis Roberts & Co. LP's $1.62 billion acquisition of book publisher Simon & Schuster Inc.
TOP DEALS AND FUNDRAISING
– KKR agreed to buy the remaining 37% stake it does not already own in insurance company Global Atlantic Financial Group Ltd. The all-cash transaction is valued at about $2.7 billion and is likely to close in the first quarter of 2024.
– Blackstone Inc. will purchase online pet care marketplace Rover Group Inc. in an all-cash deal valued at about $2.3 billion. The parties expect to complete the deal in the first quarter of 2024.
– Pantheon Ventures (UK) LLP closed Pantheon Global Secondaries Fund VII and related vehicles with total capital commitments of $3.25 billion. The fund will invest in traditional limited partner secondaries and general partner-led secondaries opportunities, particularly in the middle market.
– New Heritage Capital LLC raised $438 million for its New Heritage Capital IV LP fund, surpassing its $350 million target.
MIDDLE-MARKET HIGHLIGHTS
– ParentSquare Inc purchased Remind, which operates a communication and learning platform, from GSV Acceleration LLC.
– Siris Capital Group LLC will buy BearCom Group Inc., a wireless solutions provider, from Bertram Capital Management LLC and expects to close the deal around the end of 2023.
–WILsquare Capital LLC wrapped up the purchase of Automotive Color & Supply Corp., which supplies automotive and industrial paint.
– TJC LP signed a deal to acquire Netherlands-based Global Transport Solutions Topholding BV, which provides logistics services for the maritime market.
FOCUS ON: INDUSTRIALS
– A TJC affiliate agreed to acquire L3Harris Technologies Inc.'s commercial aviation solutions business for up to $800 million. The transaction includes a cash purchase price of $700 million and a potential milestone earnout of $100 million.
– Madison Dearborn Partners LLC bought a controlling stake in T2S Solutions through its fund affiliates. The founders of T2S, a provider of prototyping and related solutions for defense and intelligence missions, will continue to own a significant minority interest.
– CORE Industrial Partners LLC proposed to acquire all remaining shares in Fathom Digital Manufacturing Corp. not already owned by the firm and its affiliated funds for $4.50 per share in a cash deal. As of Nov. 22, CORE Industrial and its fund affiliates owned a roughly 63% voting stake.
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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