23 Aug, 2024
Big 4 PE sentiment indicators point higher; telecom investment on the rebound
By Dylan Thomas and Karl Angelo Vidal
S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
There is a building sense of optimism in the C-suites of private equity's Big Four firms.
Private equity executives used more upbeat language on the latest round of earnings calls, according to a sentiment analysis by S&P Global Market Intelligence. Record quarterly fee-related earnings at three of the four largest US-listed alternative asset managers is likely one reason why. The brightening deal outlook was clearly another.
"The deal market is back," declared KKR & Co. Inc. co-CEO Scott Nuttall when his firm reported second-quarter earnings July 31, citing cooling inflation and imminent interest-rate cuts.
While private equity exits are still plodding, data shows momentum building behind entries, with big-ticket acquisitions on a near-record pace.
Read more about the brightening deal outlook for private equity's Big Four.
CHART OF THE WEEK:
⮞ KKR & Co. Inc.'s participation in the planned $4.9 billion acquisition of internet provider Metronet Holdings LLC has private equity- and venture capital-backed investment in telecom services tracking for a rebound in 2024, according to Market Intelligence data.
⮞ Private equity-backed telecom services investment in 2023 declined 57% from the prior-year total, a slowdown linked to the impact of high interest rates on transactions in the capital-intensive industry.
⮞ With $6.57 billion in private equity telecom services deals recorded through Aug. 8, annual deal value in 2024 is now closing in on 2023's $8.61 billion full-year total.
TOP DEALS AND FUNDRAISING
– The Carlyle Group Inc. agreed to buy automotive parts wholesale distributor Worldpac Inc. from Advance Auto Parts Inc. for $1.5 billion in cash. The deal is scheduled to close before the end of 2024.
– Johnson & Johnson signed a deal to acquire Israel-based heart failure treatment developer V-Wave Ltd. for $600 million up front, with potential milestone payments of up to approximately $1.1 billion. An investor group including Pontifax Venture Capital, Triventures and Quark Venture Inc. will sell the company.
– Koch Equity Development LLC
– HarbourVest Partners LLC raised $15.1 billion at the final close of Dover Street XI LP, the firm's 11th private equity secondaries fund. It also raised $3.4 billion for its secondary coinvestment-focused Secondary Overflow Fund V LP.
MIDDLE-MARKET HIGHLIGHTS
– Norwest Equity Partners sold managed IT services provider Bailiwick Services LLC to ePlus Technology Inc.
– Audax Management Co. LLC's private equity business signed a deal to sell urologic care services provider United Urology Group to OneOncology LLC.
– Arsenal Capital Partners will add RSource LLC, which provides revenue cycle insurance claim resolution services and does business as Knowtion Health, to its portfolio.
– Cybersecurity company Cyberbit secured an undisclosed sum in a new funding round from Charlesbank Capital Partners LLC and other existing investors.
FOCUS ON: APPLICATION SOFTWARE
– Experimentation platform Eppo Data Inc. obtained $28 million in a series B funding round led by Innovation Endeavors LLC and Icon VC.
– Visitor relationship management company Leven Labs Inc., doing business as Admiral, secured $19 million in a growth equity and debt funding round led by Harbert Growth Partners.
– Game development company Mudstack Inc. raised $4 million in a financing round led by Anthos Capital LP.
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For further private equity deals, read our latest In Play report, which looks at potential private equity-backed M&A, including rumored transactions, each week.
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