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Francisco Partners predicts increased carveout opportunity; EQT relishes renewable energy deals

Good morning dealmakers! Aaron here, wishing you a happy tech Thursday.

Today we are going to look at a recent carveout by one of the firms that specializes in that strategy and how tech is driving opportunity in healthcare.

Then we have one firm that is certain that renewable investments will thrive in a tight macroeconomic environment.

And finally, we’ll have a sneak peek at some outlooks into the healthcare sector for 2023. Let’s get to it!

Consummate carveouts.  Private equity firms may be hunting potential carveout opportunities this year as big companies shed non-core assets and tighten their finances amid the uncertain economy.

Francisco Partners is looking at such deals.

“The current challenging macro-economic environment coupled with corporates that are focused on how they can improve shareholder value (e.g., slimming down portfolios and/or refocusing strategy) will result in a lot more divestiture activity,” said Justin Chen, partner at FP. “We are having a lot of these conversations across the landscape.”

Toward the end of last year, the San Francisco-based firm, which specializes in carveouts and has completed 50 since inception, purchased bswift, a provider of benefits technology and services, from CVS.

You can read the whole story here.

Renewable revolution. The rising demand for renewable energy is creating vast opportunities for investors that outweigh the impact of the tight macroeconomy, according to one firm.

Obey Martin Manayiti spoke with Alex Darden, partner and head of EQT Partners’ US infrastructure platform,about his firm’s recent investment in Madison Energy Investments, a developer of distributed generation assets. This investment comes at a time when there are growing fears of a recession that could affect the operation of renewable projects and slow the pace at which projects can be brought online.

Darden said that even though there is need for significant capital for renewable investments, “there will be limited impact” because the demand for such investments goes beyond the current economic malaise.

You can read the whole story here.

Healthcare heartbeat. I wanted to take the opportunity to tease out my series of outlook pieces for the healthcare sector that should be coming out next week. I will get predictions and thoughts from various healthcare investors, so stay tuned!

I hope everyone is having a good start to the new year. Are you preparing for a busy Q1? Or are you sitting back and waiting till Q2? I would love to hear your thoughts on deal pipelines, activity levels and where you are looking for opportunities. I would love to chat and catch up or introduce myself if we have not already chatted before. Feel free to reach out to me at aaron.w@peimeida.com and I’m looking forward to hearing from you!

That is a wrap for today. I will be back tomorrow for the first Fri-yay edition of 2023. Until then…

Cheers,

Aaron

Read thefull wire commentaryon PE Hub …

Also of note (may require subscriptions)

In a Q&A with Tom Keck on private equity trends, the StepStone partner and head of research and portfolio management says that "LPs may need to make some hard choices about committing capital in 2023, as allocations are already stretched – so fundraising will continue to be elongated." (Buyouts)

Zombie funds, LP substitutions and a dealmaking rebound could be on the cards for the Asia-Pacific private equity markets this year. (Private Equity International)

Happy New Year and welcome to 2023, the year when ‘there is no alternative’ (TINA) gives way to ‘there are reasonable alternatives’ (TARA) – in financial markets and beyond. As we get ready for another bumpy 12 months, here are three ideas to help infrastructure professionals ease into a new mindset. (Infrastructure Investor)

Time to move out of the mainstream: As the plain vanilla part of the private debt market comes under pressure, investors are turning their attention to more specialized approaches. (Private Debt Investor)

"Payments-software provider ACI Worldwide Inc. is in talks with private equity firms about a potential sale, according to people familiar with the matter." (Bloomberg)

"Mergers and acquisitions slowed substantially in 2022 as companies faced a mix of financing challenges, including rising interest rates, a pullback in leveraged finance, bond-market jitters and the possibility of a recession. But many companies adapted, structuring deals to sidestep market volatility and minimize financing costs. In doing so, they provided a glimpse of what’s likely ahead for deal making this year, bankers and advisers said." (Wall Street Journal)

"Barnes & Noble is committing to open more than 30 new stores in 2023, three years after being taken private for $683 million by Elliott Management." (Axios)

"Churchill Asset Management LLC has more than doubled the amount of capital raised from investors to make lower-ranking yet potentially higher-returning debt investments." (WSJ Pro)