| | | | | | | It's Monday and in honor of the pending Rio Olympic games, I, Luisa, will be your team captain. This morning we have a column from Alastair Goldfisher, who writes about Edison Partners. Take it away Alastair! Not all growth funds are equal. Just ask Chris Sudgen, managing partner of Edison Partners. This week, the 30-year-old Princeton, New Jersey, firm announced it had raised $275 million for Edison Partners VIII. That beat its $250 million target by 10 percent and stepped up from the $250 million that it raised for Fund VII, which closed in 2010. The fund's limited partners include corporate and public pension plans, endowments, funds-of-funds, insurers and family offices. At least four new LPs came on board. Returning LPs include New Mexico Educational Retirement Board (which was the largest investor in the previous fund); fund-of-funds Hirtle Callaghan, ORIX Ventures and Honeywell Pension (which has now backed three consecutive Edison funds). Sudgen said that although Edison's LP base understands what the firm is about, some are still confused about what constitutes a growth-stage investor. Edison's investments typically range from $5 million to $12 million, focused on young businesses that have begun posting revenue, usually $5 million to $20 million annually. This is unlike later-stage firms and many growth investors, which typically write much larger checks to more mature companies, generating more revenue and loftier valuations. Who will benefit from Brexit? Hedge funds will, according to a Preqin poll, while private equity will do meh. Preqin spoke to 142 alternative investment firms earlier this month. Some 31 percent of hedge-fund managers expect a positive short-term impact from Brexit. Only 9 percent of private capital, which includes private equity, foresee a positive impact. In the long term, which is longer than 12 months, about 23 percent of HF managers expect Brexit to be good for them but only 9 percent of private capital felt this way, the Preqin study said. Read the story here. I'm not too sure I agree with these results. What do you think? Email me at lbeltran@buyoutsinsider. Deals: There's some very interesting deal news this morning. Ultimate Fighting Championship has been sold for about $4 billion to an investor group that includes Silver Lake, KKR and Michael S. Dell's investment firm, according to the New York Times. The sale is expected to be a windfall for U.F.C.'s major owners, casino entrepreneurs Frank and Lorenzo Fertitta, who bought UFC for just $2 million in 2000, Reuters has reported. I also have a story this morning on American Stock Transfer, which is hiring bankers, I'm told. The company, which is backed by Pacific Equity Partners, is expected to go up for sale and is seeking bids of $1 billion, I'm told. Read the story here. News from Buyouts/VCJ: Sam Sutton has a story on how more GPs are aiming to charge fees for co-investments. Read his story here. Chris has a story on CalPERS hiring a firm to audit its PE program to determine whether certain GPs were complying with various aspects of their limited-partner agreements. Check it out here. Any comments, thoughts or complaints please send them to me at lbeltran@buyoutsinsider.com. -Luisa | | Today's Take | | | PE HUB First Read First Read kicks off the week with news that Ultimate Fighting Championship has been sold to an investor group that includes KKR, muggers are using the Pokemon Go app to rob them and plane tickets to London are really cheap right now because of Brexit. PE HUB Second Opinion Second Opinion ends this turbulent week with news that an Army veteran, now dead, has been identified as lone gunman responsible for the Dallas sniper attack on police officers, Theranos CEO Elizabeth Holmes is prohibited from running labs for two years and boo hoo hoo, the top 1 percent are as rich as they used to be, according to new data. CVC makes $1.1 billion buyout offer for Asia's largest funeral firm: Reuters Private equity firm CVC Capital Partners has made a $1.1 billion buyout offer, in cash and shares, to Nirvana Asia Ltd (1438.HK), Asia's largest funeral services firm, betting on rising ranks of the wealthy in the region increasing demand for luxury funerals, Reuters reported. CalPERS runs audit to see if GPs comply with fund terms California Public Employees' Retirement System hired a firm to audit its private equity program and determine whether certain general partners were complying with various aspects of their limited-partner agreements, according to two people with knowledge of the review. The results of the audit found all the GPs included in the analysis were complying with the terms... Labor costs hit middle-market companies: Golub Capital The July 8 U.S. employment report turned in a bullish 287,000 new jobs in June, while wages on the nationwide level edged up a mere 0.1 percent. But wages tell a different story in the middle market, where costs have been eating into bottom lines despite robust top-line gains, the Golub Middle Market Report says. The... Five Questions with Zachary Barnett, head of fund-finance practice, Mayer Brown You're in an emerging area of finance and law in which lenders make loans to GPs backed by LP commitments. How is the market developing? We hosted 70 attendees at an event on the topic a few years ago. In March, we took part in the annual Fund Finance Association Symposium with 600 clients including... Talking Top Quartile with John Hatherly of Wynnchurch Capital Bring us up to date on Wynnchurch. We've come a long way from our initial fund in 2000 that raised $160 million. Nowadays, we manage $2.4 billion, with four funds. We've got 30 investment pros working in Chicago, Los Angeles, Detroit, Toronto and Montreal. We invest across the performance continuum from companies in deep distress... On the move, 7.11.2016 PRIVATE EQUITY FIRMS Carlyle Group named Jesse Wu a senior adviser to the Asia buyout team. Wu is former chairman of Johnson & Johnson China and former worldwide chairman of Johnson & Johnson Consumer Group. Clayton, Dubilier & Rice named Nitin Sahney an operating adviser to its funds. Sahney is former president and chief executive of Omnicare Inc. Constitution Capital Partners named Dominic Morell an... The revolving door spins and spins I'm not one to begrudge someone wanting to make more money. If you've got the opportunity, go for it (as long as it's legal). I want to state that right up front. Having said that, I will add that something seems a little ... unsavory about former regulators moving into the industries they once regulated. At... Need to Meet: Scott Myers, chairman and CEO, Hycroft Capital When Scott Myers co-founded Cogent Partners in 2002, he planned to build a full -service merchant bank for private markets. But Cogent's secondary-advisory business grew so quickly that the firm ended up focusing mostly there. All told, Cogent completed more than 4,600 secondary transactions prior to its sale to Greenhill & Co for about $100 million in... LP Scorecard: Lone Star and Lindsay Goldberg are big cheeses for Wisconsin Aside from the Green Bay Packers, Wisconsin is also home to 65-year-old State of Wisconsin Investment Board, which manages nearly $100 billion in pension assets. Lone Star Funds and Lindsay Goldberg headlined the Badger State's private equity portfolio. As far as distribution percentage (cash out divided by cash in) goes, 2001's Lone Star Fund IV topped... Q2 exits: the return of the legendary PE-backed IPO Spotting an IPO in 2016 has been like trying to find the legendary Yeti. But in the second quarter, it finally happened: Three sponsor-backed companies went public, raising a combined $1.6 billion and breaking the IPO freeze that descended over the markets in the volatile early winter months. US Foods Holding Corp raised the majority, collecting... More GPs aim to charge fees on co-investments Private equity co-investments are getting more expensive. Roughly a third of PE general partners charge or plan to charge fees on co-investment capital pledged by their investors, research by placement agent Triago said. A year ago, the survey found less than one in four GPs charged or planned to charge such fees. Fees charged on co-investments tend... GPs turn to add-ons in Q2 in choppy deal environment With U.S. sponsors facing choppier credit markets and higher purchase-price multiples, GPs opted to buy more add-on businesses for their portfolio companies rather than launch new platforms in the second quarter. Add-on deals in Q2 comprised 52 percent of total deal count, compared with 48 percent for platform acquisitions. In the fourth quarter of 2015,... Distressed funds soar in strong Q2 fundraising environment Winter is coming, perhaps? LPs appear to be prepping for a downturn, pumping capital into turnaround and distressed funds. This strategy has raised more capital so far in 2016 than any other fund category tracked by Buyouts. The nearly $16.9 billion circled by distressed/turnaround funds included $3 billion from Cerberus Capital Management VI and $1.5 billion from... Market at a glance U.S.-based buyout and mezzanine fundraising padded its total by about $6 billion over the past two weeks, bringing the yearly aggregate to $94.9 billion. The total, however, still sits nearly $23 billion — around 20 percent — below this time in 2015. Arbor Investments closed a pair of funds for a combined $875 million. Arbor Investments IV... Chicago Pacific's inaugural fund reaches $440 mln Chicago Pacific Founders, a healthcare-services specialist formed in 2014, wrapped up fundraising for its inaugural buyout pool with about $440 million in commitments, according to a source. The total dollar figure includes $325 million for the fund and $115 million for a co-investment fund, the source said. The fundraising kicked off in October 2014, the date... Preqin: LPs not too worried about Brexit, say hedge funds will benefit most Hedge funds are seen as the big winners of Britain's vote to leave the European Union, according to a survey from Preqin. Some 31 percent of hedge-fund managers expect a positive short-term impact from Brexit, Preqin said. Only 13 percent of private capital, which includes private equity, say the referendum will be good for them over the... | | NETWORKING...CAPITAL...DEALS Early pricing thru 7/15 at mandaeast.com Save $45 on general registration, discount code pehub16 1,300 middle market dealmakers 80% generated deal leads $125 billion in capital under one roof 1,000+ 1:1 deal meetings 80% of attendees are VP, Partner, Director |
| | | | VC Deals | | | SmartNews snags $38 mln Series D News discovery app SmartNews has secured $38 million in Series D funding. Development Bank of Japan led the round with participation from SMBC Venture Capital and Sumitomo Mitsui Trust Investment-managed Japan Co-Invest LP. The capital infusion will be used for growth and expansion. | Complimentary Webinar: Improving Your Deal Sourcing Operations During this webinar you'll learn the following:
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| | | | | Onex, Baring Private Equity to buy Thomson Reuters IP&S for $3.55 bln Onex Corp and Baring Private Equity Asia said July 11 that they have agreed to buy the Intellectual Property & Science business ("IP&S") of Thomson Reuters for $3.55 billion. The deal includes an equity investment of about $1.6 billion for 100% ownership of IP&S. Onex's portion is $1.2 billion, which will come from Onex Partners IV and certain LPs. Philadelphia-based IP&S is a collection of subscription-based businesses that includes Web of Science, Thomson CompuMark, Thomson Innovation, MarkMonitor, Cortellis and Thomson IP Manager. The company employs 4,100 people across more than 75 offices in over 40 countries. Latham & Watkins LLP is serving as legal advisor to Onex and Baring Asia on the transaction. Svoboda Capital Partners sells Cape Electrical Supply Graybar Electric Company Inc has acquired Cape Electrical Supply LLC. Svoboda Capital Partners LLC was the seller. Financial terms weren't announced. Cape Girardeau, Missouri-based Cape Electrical is a regional distributor serving electrical contractors and large engineering construction firms, as well as industrial, institutional and utility customers. BB&T Capital Markets provided financial advice to Cape Electric. CVC makes $1.1 billion buyout offer for Asia's largest funeral firm: Reuters Private equity firm CVC Capital Partners has made a $1.1 billion buyout offer, in cash and shares, to Nirvana Asia Ltd (1438.HK), Asia's largest funeral services firm, betting on rising ranks of the wealthy in the region increasing demand for luxury funerals, Reuters reported. Buyout groups line up bids for former Evonik business: Reuters Buyout groups Triton, Equistone and an Asian chemicals company are preparing offers for a former business of Germany's Evonik (EVKn.DE) put on the block by its private equity owner, sources told Reuters. Caretta Partners invests in cSuite Caretta Partners LLC has invested in cSuite. Financial terms weren't announced. cSuite provides a "productivity" app that aims to help users manage mobile communication tools (email, text, calendar, contacts, Google, Dropbox) alongside a personal cloud that protects an individual's data. cSuite launched its mobile and cloud-based platform in the U.S. Apax to acquire Spain generic drug maker's operating subsidiaries Apax Partners has agreed to buy Invent Farma's operating subsidiaries from an investor group led by Silfurberg, Framtakssjur slands (Enterprise Investment Fund) and Horn II. No financial terms were disclosed. Spain-based Invent Farma is a maker of generic drugs. Apax to acquire German pharmaceutical company Neuraxpharm Apax Partners has agreed to buy German pharmaceutical company Neuraxpharm Arzneimittel GmbH. The sellers are ATAX GmbH and Neuraxpharm Holding. No financial terms were disclosed for the deal that's expected to be completed in the next few months. Three bidders line up for Emerson's Leroy Somer, say sources: Reuters Emerson Electric's alternator unit Leroy Somer is expected to attract firm offers from two Chinese companies as well as one buyout group in a potential 1 billion euro ($1.1 billion) deal, sources told Reuters. TDC receives takeover approach, shares jump: Reuters Shares in Danish telecoms company TDC (TDC.CO) jumped more than 10 percent on Friday after it said it had rejected a potential takeover approach believed to be from private equity firm Apollo Global Management (APO.N). Polycom says to be bought by PE firm; ends Mitel deal: Reuters Video conferencing equipment maker Polycom Inc said it agreed to be bought by a private equity firm for about $1.7 billion, scrapping a three-month old deal with Canada's Mitel Networks Corp. | One of a Kind Networking in The Robust Emerging Manager Space Join LPs and Intermediaries at the Emerging Manager Connect event: a one day networking opportunity with emerging superstars who will produce blockbuster returns in the next 5-10 years. Register Today! July 19, 2016 | Harvard Club | NYC |
| | IPOs | | | | | Japan's Line prices IPO at top of the range, may raise up to $1.3 billion: Reuters Japanese messaging app firm Line Corp priced its initial public offering at the top of its marketed range, putting it on track to raise as much as $1.3 billion and reflecting robust appetite for the world's biggest tech listing this year, Reuters News reported. | | | | | | | Vestar sells majority of StayWell to Merck's Healthcare Services & Solutions Healthcare Services & Solutions LLC, a subsidiary of Merck & Co, has acquired a majority stake in StayWell Company LLC. Vestar Capital Partners, the seller, will retain a significant minority. Financial terms weren't announced. Yardley, Pennsylvania-based StayWell is a health engagement company. Kirkland & Ellis LLP and Wells Fargo Securities advised Vestar. Covington & Burling LLP, Piper Jaffray & Co, and Accenture advised HSS. PE-backed BW Gas & Convenience is buying 21 Iowa convenience stores BW Gas & Convenience Holdings LLC, which is backed by Brookwood Financial Partners LLC, is acquiring 21 convenience stories in Iowa. The seller is Kum & Go. No financial terms were disclosed. In conjunction with this transaction, BW Gas & Convenience has launched its national convenience store brand Yesway located in Des Moines, Iowa. PE-backed American Fast Freight buys Global Transportation Services The Jordan Company-backed American Fast Freight Inc has acquired Kent, Washington-based Global Transportation Services Inc, a freight forwarding and third-party logistics company. No financial terms were disclosed. | | Firms & Funds | | | | | Bain Capital Ventures raises $600 mln fund Bain Capital Ventures has raised a $600 million venture fund, according to a filing with the SEC. Sienna Ventures launches $100 mln fund Sienna Ventures has launched an $100 million venture fund. The pool will target mid-sized capital efficient companies. LionBird Venture Capital collects over $25 mln for second fund Israel and Illinois-based early-stage venture firm LionBird Venture Capital has raised over $25 million for its second fund, according to an SEC filing. LionBird II's target is $50 million. | | Human Resources | | | | | Timko joins Finstar Financial Finstar Financial Group said July 11 that Eugene Timko has joined the private equity firm as Investment Director, while Michele Tucci was named Head of Mobile Products and Business Development, and Alexander Ivanov was appointed to develop venture capital investments. Life sciences investor Lawrence Bock passes away at 56 Longtime venture capitalist and biotech entrepreneur Lawrence Bock, who co-founded Avalon Ventures in 1988, passed away at his home on July 6 after battling pancreatic cancer. He was 56. Bock, born Sept. 21, 1959, in Brooklyn, New York, founded joined Fairfield Venture Partners in 1985 after doing research at Genentech in infectious diseases and earning an MBA from UCLA. He then helped launched Avalon and then moved to CW Group in 1997. He most recently was serving as a special limited partner at Lux Capital. Goldman Sachs hires former EU chief Barroso: Reuters Goldman Sachs (GS.N) has hired the former head of the European Commission Jose Manuel Barroso as an advisor and non-executive chairman of its international unit, the U.S.-based investment bank said on Friday. | | Odds & Ends + Hot Links | | | | | PE HUB First Read First Read kicks off the week with news that Ultimate Fighting Championship has been sold to an investor group that includes KKR, muggers are using the Pokemon Go app to rob them and plane tickets to London are really cheap right now because of Brexit. PE HUB Second Opinion Second Opinion ends this turbulent week with news that an Army veteran, now dead, has been identified as lone gunman responsible for the Dallas sniper attack on police officers, Theranos CEO Elizabeth Holmes is prohibited from running labs for two years and boo hoo hoo, the top 1 percent are as rich as they used to be, according to new data. |
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