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US PE continues IT push; dealmaking reaches 5-year high

IT remained the most attractive sector for U.S. private equity and venture capital buyout firms in the second quarter, with 696 entries announced.

Cumulatively, 1,449 IT entries were made in the first half of 2021 with a gross transaction value of $79.41 billion, the highest value since the start of 2019. Of the 3,585 entries made overall in the U.S. during the period, IT accounted for about 40%.

A number of multibillion-dollar IT deals were announced in the second quarter, including Thoma Bravo LLC's take-private of cybersecurity company Proofpoint Inc. for $12.3 billion in cash, and KKR & Co. Inc. and Clayton Dubilier & Rice LLC's agreed-upon acquisition of enterprise cloud software company Cloudera Inc., also listed, in an all-cash deal that values the company at roughly $5.3 billion.

The healthcare sector was the second-most attractive in the first half. A total of 698 entries were recorded with a gross transaction value of $31.23 billion. Although deal volume dipped from 385 entries in the first quarter to 313 deals announced in the second quarter, year-over-year activity increased 8%.

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U.S. private equity and venture capital entry volume and value hit five-year first-half highs in 2021, recording 3,585 deals with an aggregate value of $201.29 billion, according to S&P Global Market Intelligence data.

Second-quarter transaction volume and value were down roughly 10% and 5%, respectively, compared to the previous quarter.

An aggregate 354 U.S.-based funds closed in the second quarter, up from 338 vehicles in the preceding period. The second quarter brought in $170.45 billion in capital commitments, up from the $137.12 billion in capital commitments raised in the prior quarter.

FUNDRAISING AND DEALS

* Funds managed by Apollo Global Management Inc. are in early-stage talks to join an investor group led by Fortress Investment Group LLC in the planned purchase of British grocery chain Wm Morrison Supermarkets PLC.

Separately, funds managed by Apollo's affiliates completed their acquisition of industrial staffing company EmployBridge LLC.

* Bain Capital Private Equity LP is purchasing online healthcare services marketplace PartsSource Inc. in a deal with Great Hill Partners LP.

A consortium consisting of Bain, Fortress and Italian debt recovery firm doValue SpA will commence exclusive talks with National Bank of Greece SA to buy the bank's portfolio of bad debts.

* The Carlyle Group Inc. will buy live video streaming and remote production solutions company LiveU Inc. from Francisco Partners Management LP. The firm is also one of the bidders shortlisted by Baring Private Equity Asia for India-based IT service company Hexaware Technologies Ltd., alongside Bain and KKR & Co. Inc., according to Reuters, citing four people with knowledge of the transaction.

* Advent International Corp. and online financial platform developer Stellar Development Foundation are considering making a joint bid to purchase money-transfer service company MoneyGram International Inc., Bloomberg News reported, citing people familiar with the matter.

ELSEWHERE IN THE INDUSTRY

* Vista Equity Partners Management LLC-backed event management software company Cvent Inc. agreed to combine with special purpose acquisition company Dragoneer Growth Opportunities Corp. II at an enterprise valuation of more than $5 billion, including debt, people familiar with the matter told The Wall Street Journal.

* KKR- and TPG Capital LP-owned Singaporean online real estate company PropertyGuru Ltd. is close to reaching a merger deal with blank-check company Bridgetown 2 Holdings Ltd. at an enterprise value of about $1.8 billion, Bloomberg reported, citing people with knowledge of the matter.

* American Securities LLC is divesting building envelope system provider Henry Co. LLC to Carlisle Cos. Inc. at a price of about $1.58 billion.

* Energy Capital Partners LLC-sponsored SPAC ECP Environmental Growth Opportunities Corp. signed a merger deal with manufacturing and digital supply chain company Fast Radius Inc. that could value the combined entity's equity at $1.4 billion.

FOCUS ON: SPECIALTY FINANCE

* Lightyear Capital LLC will purchase Wren Sterling Financial Planning Ltd. from Palatine Private Equity LLP.

* General Atlantic Service Co. LP led a series B financing round for Mexican financial technology firm and credit card provider Klar Sociedad Anónima de Capital Variable. The firm also led a €100 million series C round for spend management platform Spendesk SAS.