S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
More than six months after the collapse of SVB Financial Group sent tremors through the startup ecosystem, an uncertain economic outlook continues to keep a lid on venture capital investment.
The reported value of global venture capital funding rounds in the third quarter fell nearly 30% year over year to $56.93 billion, according to S&P Global Market Intelligence data. The industry tallied just 3,323 funding rounds in July, August and September, a decline of nearly 35% from the third quarter of 2022.
Growing optimism around a recovery in the IPO market is welcome news for venture investors. While recession fears appear to be fading, the prospect of slower global economic growth and sustained high interest rates is weighing on startup valuations.
Chances for a turnaround in 2023 are getting slim. Monthly venture capital funding totals have posted a string of year-over-year declines extending all the way back to March 2022.
Read more about venture capital investment in the third quarter, including the top 10 global funding rounds for the period.
CHART OF THE WEEK: Private equity's top financial and legal advisers
⮞ Wells Fargo Securities LLC, J.P. Morgan Securities LLC and Morgan Stanley were the most active financial advisers on private equity and venture capital deals through the first three quarters of 2023, with five deals apiece.
⮞ Wells Fargo Securities led in deal credit at the end of the third quarter, topping the adviser ranking with $38.89 billion in reported transaction value.
⮞ Kirkland & Ellis LLP stood atop the list of legal advisers on private equity and venture capital deals. The firm advised on nine transactions and registered $45.12 billion in deal credit between Jan. 1 and Sept. 30.
TOP DEALS AND FUNDRAISING
– Ara Partners Group LLC purchased Vacuumschmelze GmbH & Co. KG, a German producer of rare earth magnets. Funds managed by Apollo Global Management Inc. were the sellers in the deal.
– An investor group including Sixth Street Partners LLC, Pacific Investment Management Co. LLC, KKR & Co. Inc., Bayview Asset Management LLC and CardWorks Inc. agreed to buy financial technology company GreenSky Inc. from Goldman Sachs Group Inc. The transaction is likely to close in the first quarter of 2024.
– Appian Capital Advisory LLP raised $2.06 billion at the final close of its third fund. The vehicle will invest in metals and mining assets and their adjacencies.
– Warburg Pincus LLC closed its Warburg Pincus Global Growth 14 LP fund with total commitments of $17.3 billion. The fund is the largest-ever raised by the firm, exceeding its $16 billion target, and will invest in growth companies.
– Incline Equity Partners wrapped up fundraising for Incline Equity Partners VI LP with capital commitments of more than $1.9 billion. The fund crossed its initial target and received more than $120 million from Incline's partners and employees.
MIDDLE-MARKET HIGHLIGHTS
– Middle-market private equity firm Revelstoke Capital Partners LLC received a passive minority investment from Bonaccord Capital Partners.
– SK Capital Partners LP agreed to purchase J&K Ingredients Inc., a food preservation solutions company, from CORE Industrial Partners LLC. The transaction is set to be completed before the end of the year.
– AEA Investors LP is exiting Melissa & Doug LLC in a cash transaction valued at $950 million. Spin Master Corp. agreed to buy the early childhood play brand, and the deal is expected to close in the first quarter of 2024.
– Sverica Capital Management LP-backed Zyston LLC purchased Blue Lava Inc., a provider of security program management software solutions, from an investor group including CrossLink Capital Inc., Rally Ventures, Apple Funds and OODA Ventures.
FOCUS ON: RESEARCH AND CONSULTING SERVICES
– BharCap Partners LLC completed the purchase of ARMStrong Receivable Management, which provides receivable management solutions for insurance companies.
– TPG Rise Climate LP, TPG Capital LP's impact investing platform, agreed to buy testing, inspection and certification company AmSpec Services LLC. Olympus Advisors LLC and Olympus Growth Fund VI LP are among the sellers.
– BHS Private Equity Fund, which is sponsored by BH Securities AS, and Versute Investments acquired Czech Republic-based research, development and testing services provider Altran CZ AS, which changed its name to Tiyo AS. Tiyo's managers Petr Havlík, Jaromír Kejval and Milan Křovina were also part of the buying consortium.
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.