The Wire

Nov. 29, 2021

TCV runs strip sale on group of assets out of older funds, Clearlake agrees to buy Quest Software from Francisco

Happy Monday!

Hope you had a fun and relaxing holiday weekend!

A few deals came through over the past few days — big one this morning:

Clearlake Capital agrees to acquire cybersecurity software provider Quest Software from Francisco Partners. The deal values Quest at $5.4 billion including debt, Wall Street Journal reported. As part of the deal, Patrick Nichols, Quest’s CEO, will continue to lead the company long with the existing management team.

Strip: Technology Crossover Ventures is running a sale of a strip of 13 “relatively mature” assets out of older funds with total net asset value of around $1 billion, three sources told Buyouts.

Strip sales have historically not represented a huge slice of secondary volume compared to continuation fund deals and traditional LP portfolio sales. However, some sources believe strip sale activity, especially for venture and growth managers, will pick up as buyers seek diversification away from the concentrated bets they made earlier this year on big single-asset continuation fund deals. Read more here on Buyouts.

That’s it for me! Have a great Monday. Hit me up with tips n’ gossip, feedback or book recs at cwitkowsky@buyoutsinsider.com or over on LinkedIn.

Read the full wire commentary on PE Hub...

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Also of note (may require subscriptions)

The FT's editorial board says "LV's management team done a poor job of defending a private equity-backed takeover," which in turn has "allowed private equity to be cast as the villain."

"Historically low interest rates and high stock valuations are driving return-hungry investors to rush into private markets, with non-publicly listed assets under management expected to rise 60 per cent between 2020 and 2025." (Financial Times)

"More private-equity firms, including midmarket shops, are factoring environmental, social and governance issues when considering whether or not to invest in deals." (WSJ Pro)

"Carlyle's infrastructure effort focuses mostly on development. But Macky Tall, chair of infrastructure, says mature projects are less risky, generate reliable cash flow and can act as an inflation hedge." (WSJ Pro)

They said it

“You’ll see a lot of private equity and venture managers take advantage of strip sales, preferred equity and in some cases multi-asset GP-leds to send some distributions back to investors.”

— A secondaries buyer talks to Buyouts about activity in the secondary market.

Today's letter was prepared by Chris Witkowsky

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