The Wire

Jul 8, 2022

PE firms like TPG speed up EV deals; Red Dog-backed Mammoth buys more car washes

Happy Fri-yay, dealmakers! It’s Aaron Weitzman here on the wire.

Although “the R word” is being discussed heavily, it seems as though the labor market is staying strong. The June jobs report was released this morning, with 372,000 jobs added in the month and the unemployment rate was unchanged at 3.6 percent and close to historic lows.

That’s encouraging news for PE firms, many of whom tell us the biggest challenge for their portfolio companies these days is to hire and retain employees.

Electric vehicles. PE Hub’s Obey Martin Manayiti spotted a trend with PE firms investing in electric vehicles, with TPG among the buyers.

Other recent buyers include Clearlake Capital, Lincolnshire Management, Aterian Investment Partners and Spring Lane Capital.

Read the whole story here.

Car wash boom. Another trend we've been tracking this summer is that PE firms are snatching up car washes. Obey wrote a feature on this back in May.

And now, Red Dog Equity-backed Mammoth Holdings has bought three more car washes.

Fund closure. Buyouts’ Chris Witkowsky wrote about TCG Capital’s closure of the firm’s third fund.

“TCG Capital, the investment firm formed by Peter Chernin, the former number two at News Corp, has closed its flagship commingled fund on $1.3 billion, beating its initial target,” wrote Chris.

Read the whole story here.

I wonder what investments TCG will make with the money raised? As always, if you here of any M&A market chatter, I am always interested in that. Feel free to let me know what you are seeing and hearing out there. Hit me up at aaron.w@peimedia.com. While I am highly interested in any healthcare deals, I am also open to hearing about any deals, regardless of sector.

Speaking of healthcare…

In case you missed it. Earlier this week, we published my interview with Devin O'Reilly, managing director of private equity and North America head of healthcare at Bain Capital as part of PE Hub’s ongoing healthcare spotlight series.

O’Reilly dished about the firms’ approach to healthcare investing, some themes Bain is investing in and about the firms’ longer-than-average hold time for its healthcare assets.

“We have a longer-term orientation than many of our peers with an average hold period over six years,” said O’Reilly. “This is because we’re looking for businesses where there’s some type of inflection point, not businesses that are aiming to maintain the status quo.”

Read the whole story here.

I will be releasing two more healthcare spotlight series stories next week, featuring Court Square Capital Partners and Signet Healthcare Partners. As a reminder, I am always looking to profile more PE firms investing in healthcare, so send ‘em my way!

That is a wrap for me. I am currently in the middle of a New England road trip! I am writing this from the Berkshires in Massachusetts. Then on Saturday, I’m off to my old stomping grounds of New Hampshire for a few days to see family and then ending the trip in Boston, where I will be writing to you again next Friday.

MK Flynn will be back with another edition of the Wire on Monday.

Hope you all have a great weekend!

Cheers,

Aaron

Read the full wire commentary on PE Hub ...

SPONSORED INSIGHT

Want to save money on your cyber insurance?

You know it’s a necessity, but premiums are up 50% and one in three applications are rejected. Get pre-approved and save up to 30% with SolCyber.

Access SolCyber Insurance+

Also of note (may require subscriptions)

While women remain underrepresented in private markets, particularly at senior levels, Private Equity International’s annual Women of Influence list demonstrates that there is certainly no shortage of female talent.

"RCP Advisors has closed its fourth direct co-investment fund at $645.4 million, beating its $500 million target." (Buyouts)

"The California Public Employees’ Retirement System sold about $6 billion of its stakes in private equity funds to second-hand buyers, severing ties with a slew of past managers and freeing up cash for new wagers." (Bloomberg) [Buyouts nodded to this way back in January, and added a follow-up in March, but we're not keeping score or anything :) ]

"Michael B. Kim, whose private equity firm manages more than $25 billion in assets, is among the prospective buyers of the Washington Nationals, multiple people with knowledge of the process said this week." (Washington Post)

"Companies in the market for deals are grappling with higher financing costs and lower valuations as inflation and an uncertain economic outlook threaten to weigh on mergers and acquisitions for the remainder of this year." (Wall Street Journal)

"After a record fundraising year, there are worries that private equity’s golden era is over. ... But worry not. Private equity is attracting a new wave of investors, in the form of billionaire family offices and high-net-worth retail money." (Washington Post)

"One of the world’s biggest battery companies is mulling a reversal on a $1.3 billion project to churn out electric vehicle powerpacks in Arizona. South Korea’s LG Energy Solution Ltd. cited surging costs and slowing demand as it now rethinks the investment announced in April. That’s a blow to EVs and batteries, and to the US as it tries to build out its supply chain. It is however, a much-needed opening for funding for under-the-radar technology breakthroughs." (Washington Post)

"Tikehau Capital is one of relatively few investment firms to embrace the expanding secondary market for private-debt assets." (WSJ Pro)

"A federal bankruptcy judge has ruled that a lawsuit against former Toys 'R' Us executives and directors, including partners of private equity firms Bain Capital, KKR, and Vornado Realty Trust can proceed." (ICV2)

“I think the democratization of vehicles and the knowledge of these EVs and charging locations is going to create a meaningful acceleration of electric vehicle adoption.”

— Scott Gilbertson, partner, TPG Growth

Today's letter was prepared by Aaron Weitzman

Subscribe now to get full, unlimited access to all PE Hub content, including every PE Hub Wire article.

Please visit Buyouts for the latest insight into LP activity and Venture Capital Journal for comprehensive coverage and analysis of what’s happening in VC.

London | New York | Hong Kong

PEI Media Group Ltd is registered in England no.6135779

Registered office: 7th Floor, 100 Wood Street, EC2V 7AN

To update your PE Hub email preferences, or to unsubscribe, click here.