S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Inflation concerns, the interest rate direction and a lazy M&A market have continued into 2024, but a surprise has been private equity deals with a price tag of $5 billion and above. The megadeals are soaring this year, pacing to match or even beat a 22-year record.
Spending of the record $2.62 trillion dry powder pile appears to have begun in a big way for some firms that have fallen behind in their capital deployment, according to Janet Brooks, partner at private placement agent Monument Group.
The availability of private credit was not a driver of the huge deals, according to Kevin Amess, director of the Centre for Private Equity and MBO Research. Historically, large deals relied on leverage, but today's megadeals typically use a modest level of debt, Amess said.
The largest private equity deal thus far in 2024 was in the technology, media and telecom sector, but another unexpected data point was that the industry accounted for only five of the 13 megadeals announced for the year to July 29.
Read more about private equity deals worth $5 billion and up.
Private equity CEO pay
CHART OF THE WEEK: Private equity deals pacing for stronger year
⮞ From Jan. 1 to July 31, global private equity deal value hit $369.51 billion, up 26% from the same period in 2023, according to S&P Global Market Intelligence data.
⮞ In July, transaction value came to $59.26 billion, a 32.7% increase from the same month in 2023 and about 44% higher than July 2022.
⮞ Deal momentum is continuing into the third quarter and could rise further following an expected interest rate cut in September.
TOP DEALS AND FUNDRAISING
– Carlyle agreed to buy Vantive Health LLC, Baxter International Inc.'s kidney care business, for $3.8 billion.
– An affiliate of Lone Star Funds agreed to acquire Carrier Global Corp.'s commercial and residential fire business for $3 billion in enterprise value. The deal is expected to close by the end of 2024.
– Clayton Dubilier & Rice LLC and the Cheney family agreed to sell foodservice distributor Cheney Bros. Inc. to Performance Food Group Co. for $2.1 billion in cash. The deal is expected to close in 2025.
– Blackstone Inc. agreed to buy a majority stake in hotel accounting software and services provider M3 LLC.
– Resurgens Technology Partners raised $800 million at the close of Fund III. The vehicle will make majority investments in software businesses.
– NextGen Growth Partners LLC secured $165 million at the close of Nextgen Growth Partners Fund III LP.
MIDDLE-MARKET HIGHLIGHTS
– Harvest Partners LP sold datacenter maintenance services provider SEI Inc., doing business as Service Express, to Warburg Pincus LLC.
– Blackstone agreed to make a majority investment in healthcare advisory firm The Chartis Group LLC. Middle-market private equity firm Audax Management Co. LLC's private equity business also participated in the investment.
– An affiliate of H.I.G. Capital LLC acquired UK property maintenance services provider Axis Europe Ltd. The seller was Axis Europe's founder and owner, John Hayes.
FOCUS ON: APPLICATION SOFTWARE
– Insight Partners and Sixth Street Growth made a $456 million growth equity investment in private content network company Kiteworks USA LLC.
– Vista Equity Partners Management LLC signed a deal to buy enterprise procurement and supplier collaboration company Jaggaer LLC from Cinven Ltd.
– CVC Capital Partners PLC agreed to buy a significant stake in enterprise resource planning software company Epicor Software Corp., which is backed by Clayton Dubilier & Rice.
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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.
For private credit news, see our latest private credit newsletter issued twice per month.