The Wire

Sep 19, 2022

Tech IPO drought beats records; Ronin’s David Feierstein discusses latest deal

Good morning, dealmakers. MK Flynn here with the Wire.

This week will mark the longest drought in tech IPOs this century, surpassing previous records set during the 2008 financial crisis and the dot com bust of the early 2000s, the Financial Times reports, citing data from Morgan Stanley’s technology equity capital markets team.

With the IPO exit route closed, we may see more M&A deals by corporations in tech, like the announcement last week that Adobe has agreed to buy design collaboration software maker Figma for $20 billion.

Speaking of that deal, the Wall Street Journal published a fascinating profile of 30-year-old Dylan Field, the Figma co-founder who left Brown University in his junior year after winning a $100,000 fellowship from venture capitalist Peter Thiel.

More tech deals. Expect more lower middle-market PE-backed tech deals from Resurgens Technology Partners. The Atlanta-based tech-focused PE firm announced on Friday that it has completed fundraising for its second flagship fund with more than $500 million in total capital commitments.

Fund II will continue to make majority investments in North American and select European lower middle-market application and IT infrastructure software businesses. Since its founding, Resurgens has invested in 11 tech-focused platform companies and has closed nine add-on acquisitions. 

Refrigeration consolidation. On PE Hub this morning, Obey Martin Manayiti has an interview with David Feierstein, co-founder and managing partner of Ronin Equity Partners.

The New York PE firm announced this morning that its recently launched operating company Due North has acquired MTL Cool. Both companies are based in the Toronto area and provide refrigeration equipment for retailers, including grocery stores, pet stores, pharmacies and ice cream shops.

Read the whole story here.

Reader feedback. PE Hub has launched a new reader survey, and we’d love to hear from you.

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And, as always, you can reach out to me at mk.flynn@peimedia.com

Finally, I want to say that my thoughts are with our colleagues in the UK at PE Hub Europe, Private Equity International and throughout PEI who are observing a national day of mourning, as Queen Elizabeth II is laid to rest.

Her life of service is a model to us all.

All the best,

Read the full wire commentary on PE Hub ...

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Also of note (may require subscriptions)

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"Buyout shop Clayton, Dubilier & Rice has collected around $10 billion in an initial closing of its latest private-equity fund, raising the money in around four months, according to people familiar with the effort, as investors funnel more of their private-equity commitments to experienced managers." (Wall Street Journal)

"A saturated market for institutional clients is pushing asset managers to pursue another business: selling so-called alternative investments to rich individual investors." (Financial Times)

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In FT's "Lex" today: "Cyprus has attracted a different sort of visitor recently. US buyout group Lone Star has taken an interest in Bank of Cyprus, the island nation’s largest lender. It has made three unsolicited offers and says it is pondering a fourth. The latest values the bank at almost €700mn. But an attractive price alone may not win Lone Star the prize it craves."

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"Advent International is among private equity firms eyeing a possible counterbid for GB Group after the revelation that GTCR is considering making a cash offer for the British tech company." (The Times)

"Baring Private Equity Asia is passing up on as much as $6 billion of deals as it awaits a further decline in valuations amid an outlook for a possible global recession, in a sign that this year’s slowdown in private-equity transactions may have further to run." (Bloomberg)

"Another culture war front: Are companies too ‘woke’ when it comes to climate? Conservatives in the U.S. have targeted firms for their environmental policies, but many companies are standing their ground." (New York Times)

Private equity firms "are scooping up eye care physician practices nationwide as money-making opportunities grow in medical eye care with the aging of the U.S. population." (Fortune)

"Movement to defund fossil fuels is coming for the private equity industry" (CBS)

“Expectation gaps are bridged if you’ve got the right formula for the future.”

— David Feierstein, co-founder and managing partner, Ronin Equity Partners

Today's letter was prepared by MK Flynn

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