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EQT eyes expansion into healthcare growth; cybersecurity sees latest megadeal

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EQT eyes expansion into healthcare growth; cybersecurity sees latest megadeal

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

EQT AB (publ) has ambitions to add further firepower to its healthcare dealmaking capabilities on the back of its €450 million acquisition of European life sciences venture capital firm Life Sciences Partners BV, or LSP, announced this week.

The acquisition will combine LSP's experience in scientific risk in healthcare investing with EQT's focus on commercialization risk of established products when assessing late-stage buyouts.

There is "a whole range of companies" that are "super attractive" in subsectors both firms cover today but fall outside of their fund remits, Michael Bauer, co-head of EQT's global healthcare sector team, said in an interview.

LSP Managing Partner René Kuijten said at times the firm has been unable to invest in crossover rounds in companies it has already backed ahead of an IPO because ticket sizes are too large for its fund. "If we could together set up a growth fund that also puts money at these stages, which are very interesting, that would be wonderful."

Other private equity managers have been building out their life sciences and growth capabilities. Alternatives giant Blackstone Inc. raised a sizable $4.6 billion for its dedicated life sciences fund in 2020, for example, which targets growth investments through to investments in established companies.

EQT believes it can compete with the largest funds, particularly given the underfunding of life sciences companies in Europe. Many companies are forced to "turn to the U.S. at a later stage in their developments," Bauer said. "That's a big opportunity where we can shape and impact the market."

CHART OF THE WEEK: Cybersecurity valuations heat up

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► The announced $12 billion take-private of McAfee Corp. by an investor group led by Advent International Corp. and Permira Advisers LLC is the second-largest transaction for a cybersecurity company this year, just shy of Thoma Bravo LP's $12.3 billion acquisition of Proofpoint Inc.

► McAfee's sale of its enterprise business to Symphony Technology Group LLC, announced in March, ranked as the fifth-largest transaction for the year-to-date, at $4 billion.

► Cybersecurity valuations have boomed this year, eclipsing that of other technology sectors. In the first three quarters of the year, the median deal multiple for cybersecurity companies stood at 11.3x trailing-12-month sales, compared to 7x trailing-12-month sales across all technology and telecom deals.

FUNDRAISING AND DEALS

* Blackstone Inc. will provide up to $250 million to U.K.-based biotechnology company Autolus Therapeutics PLC. Separately, funds managed by the private equity giant will make a significant equity investment in Renaissance Learning Inc., together with the pre-K-12 educational technology company's current investors Francisco Partners Management LP, which will retain its majority stake in the business, and TPG Capital LP's The Rise Fund.

* KKR & Co. Inc. is planning to increase its stake in Telecom Italia SpA's fixed-line network, three sources told Reuters. The firm is also acquiring an approximately 4.7% stake in German hair care company Wella AG from beauty product maker Coty Inc. for about $215.7 million. It also entered into an agreement to buy Japanese chemical storage tank operator Central Tank Terminal Co. Ltd. from a Macquarie Infrastructure & Real Assets Inc. affiliate in a deal set to close by the fourth quarter.

* Brookfield Asset Management Inc. raised over C$500 million for its Brookfield Technology Partners II LP growth fund.

ELSEWHERE IN THE INDUSTRY

* Private equity firms, together with American Tower Corp. and Digital Realty Trust Inc., were among the parties that expressed interest in acquiring data center operator CoreSite Realty Corp., Reuters reported, citing people familiar with the matter.

* Scottish fund manager Abrdn PLC is in discussions to buy J.C. Flowers & Co. LLC-backed British online broker Interactive Investor Ltd., which could be valued at £1.5 billion, The Wall Street Journal reported, citing a person familiar with the matter.

* PAI Partners will exit specialist medical equipment company Atos Medical AB to Danish medical device and services provider Coloplast A/S in a €2.16 billion buyout transaction.

FOCUS ON: APPLICATION SOFTWARE

* EQT AB (publ) is divesting its stake in Finnish food delivery company Wolt Enterprises Oy in exchange for shares in DoorDash Inc.

* A Gemspring Capital LLC affiliate bought a majority interest in case management software and IT services company AINS Inc.

* TA Associates Management LP deployed capital into Riskonnect Inc., with majority investor Thoma Bravo LP retaining a significant equity investment in the risk management software platform.