Blackstone buys up life insurance stake; life sciences tools in demand

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

The Blackstone Group Inc. reached a deal with American International Group Inc. to acquire a minority stake in its Life & Retirement business for $2.2 billion. The two parties also agreed to enter into a long-term strategic asset management relationship.

Blackstone will manage an initial $50 billion of Life & Retirement's existing investment portfolio, with that amount increasing to $92.5 billion over the next six years.

The private equity giant will acquire a 9.9% equity stake in Life & Retirement, which AIG plans to separate from its existing business. AIG also agreed to sell its interests in a U.S. affordable housing portfolio for $5.1 billion to Blackstone Real Estate Income Trust Inc. Blackstone President and COO Jonathan Gray will join Life & Retirement's board.

Alternative asset managers have signed off on a number of insurance deals in recent months, with such businesses offering permanent capital, providing the opportunity to deliver a steady stream of fees and being viewed as a tool to drive growth.

Apollo Global Management Inc. announced in March that it would merge with Athene Holding Ltd., the life insurance business it helped to create in 2009 and for which it manages the majority of its asset base, bringing in fees for doing so.

Blackstone agreed to buy Allstate Life Insurance Co. for $2.8 billion in January and entered into an asset management agreement for the latter's $28 billion of investments.

Read more about alternative asset managers' rush for insurance assets here.

CHART OF THE WEEK: Opportunity in life sciences tools

➤ Although revenues in the life sciences tools and services sector have been slow to recover to pre-pandemic levels, the impact is expected to be short-lived as companies assess portfolios to make sure they align with future needs, according to an Ernst & Young report.

➤ The growing demand and use of virtual tools and technologies to provide healthcare services amid the pandemic is spurring opportunities for private equity.

➤ In 2020, the global life sciences tools market was estimated at $92.2 billion, and that figure is projected to hit about $227.3 billion by 2028, growing at an 11.9% CAGR over the forecast period, according to a report by Grand View Research Inc.

FUNDRAISING AND DEALS

* Apollo is reportedly in talks to acquire a portfolio of assets from communications infrastructure company Lumen Technologies Inc. for over $5 billion. Separately, the private equity firm's co-founder Josh Harris is looking to launch a middle-market-focused fund with approximately $5 billion in capital, Bloomberg News reported, citing people familiar with the matter.

* EQT AB (publ) agreed to buy waste-to-energy facility operator Covanta Holding Corp. for $5.3 billion, including assumed net debt obligations.

* Permira Advisers Ltd. signed a deal to acquire a stake in digital marketplace operator Adevinta ASA from eBay Inc. for $2.25 billion.

* Ares Management Corp. is aiming to raise $1.5 billion for a new fund that will invest in the equity and debt of sports leagues, teams and related businesses, Sportico reported.

ELSEWHERE IN THE INDUSTRY

* Hillhouse Capital Management Ltd. emerged as the preferred bidder for Advent International Corp.-backed King Koil China, and the deal could be valued at more than $2 billion, Bloomberg reported, citing people familiar with the matter.

* Advent and Bain Capital LP also submitted a joint proposal to buy blood-plasma supply businesses Biotest AG and Bio Products Laboratory Ltd. from Chinese pharmaceutical group Creat Group Co. Ltd. at a potential combined valuation of up to $3 billion, people familiar with the matter told Bloomberg.

* Blackstone's Blackstone Credit, along with other investors, is backing the pending $1.58 billion merger of CBRE Group Inc.-sponsored blank-check company CBRE Acquisition Holdings Inc. and clean electrification company Altus Power Inc.

* Dyal Capital Partners is looking to buy an approximately 5% stake in the Sacramento Kings National Basketball Association team, The Wall Street Journal reported, citing people familiar with the matter.

* HgCapital LLP agreed to inject about $1 billion into InsightSoftware.com Ltd. in exchange for a significant minority stake in the enterprise performance management software company.

FOCUS ON: COMMODITY CHEMICALS

* Advent is selling industrial coating resins producer allnex Holding GmbH to PTTGC International (Netherlands) BV at an approximately €4 billion valuation.

* BC Partners is planning to sell industrial ceramics company CeramTec GmbH at a valuation of €4 billion or more, Bloomberg reported, citing people familiar with the matter.

* CVC Capital Partners Ltd. agreed to divest specialty resins producer AOC LLC to a Lone Star Funds affiliate.

* KPS Capital Partners LP will buy Tate & Lyle PLC's stakes in the Almidones Mexicanos SA de CV and DuPont Tate & Lyle BioProducts LLC joint ventures through a newly formed company, along with its primary products business in North America and Latin America, in a $1.7 billion deal.