S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Following an $800 million funding round led by SoftBank Corp. and Tiger Global Management LLC, U.K. financial technology company Revolut Ltd. now commands a $33 billion valuation. But the market is not in bubble territory, even if there are signs of overexuberance, industry experts said.
Revolut's latest funding round cements the online banking services provider's position as the U.K.'s most valuable fintech company. It now has a higher market value than NatWest Group PLC, the high-street lender with roughly £775 billion of assets.
Industry experts say the fintech sector still offers up good investment opportunities and the surge in capital deployment is driven by solid fundamentals, such as a major shift toward digital banking, payments and e-commerce that has been amplified by the pandemic.
Exits, too, have proved fruitful, which is leading to further interest from investors in the sector, particularly venture capitalists, according to Ronit Ghose, global head of banking, fintech and digital assets at Citi Global Insights.
"We are seeing a lot of M&A, and a lot of IPOs. You can see that for successful fintechs, whether that success is measured by client numbers, profits, revenues, there are a lot of exit opportunities. That's what's driving a lot of money into the space," Ghose said in an interview.
But there is a degree of risk. "Plenty of companies being built now just aren't going to make it, for a variety of reasons," Ghose said. "But I don't think it's all speculation. There will be failures, but there are some great opportunities, too."
Read more about recent investments in the U.K. fintech space, and the outlook for the market and its investors here.
CHART OF THE WEEK: PE turns to four-legged friends for rare e-commerce megadeal
➤ Hellman & Friedman LLC's proposed $3.2 billion take-private of European online pet supplies platform zooplus AG stands to become one of the 10 largest private equity buyout deals in the e-commerce market since 2016.
➤ Out of 577 private equity e-commerce M&A deals announced over the past five years, only 10 were valued at $1 billion or more, according to S&P Global Market Intelligence data. Two of these high-valuation deals were announced in 2021, including the Hellman-Zooplus transaction.
➤ The depressed valuations could be attributed to the tendency for large e-commerce companies to opt for public offerings as they go for scale instead of selling to buyout firms. There is also a lack of competition among private equity, corporate and strategic buyers to drive up prices, Scott Denne, a senior research analyst at 451 Research, said in an interview with Market Intelligence.
FUNDRAISING AND DEALS
* The Carlyle Group Inc.-managed funds are poised to sell Workforce Logiq to Pro Unlimited Inc., which will buy the workforce intelligence, technology and services provider under a deal with EQT Private Equity.
* Platinum Equity LLC completed the acquisition of aircraft parts maker Unical Aviation Inc. and certain of its affiliates from affiliates of the company's founders.
* An equity consortium led by Nordic Capital and including Insight Partners will buy cloud-based healthcare platform provider Inovalon Holdings Inc. for $7.3 billion.
* Permira Advisers Ltd. is working with Goldman Sachs on the potential sale of business services company Tricor Group, which could be valued at up to $2 billion, Reuters reported, citing three people with knowledge of the transaction.
ELSEWHERE IN THE INDUSTRY
* GI Partners LLC received approval from the U.S. Federal Communications Commission for its acquisition of Orbcomm Inc. in a deal expected to close by early September.
* Stirling Square Capital Partners LLP's Stirling Square Capital Partners IV fund and its co-investors will acquire a majority stake in Itelyum, and Deutsche Beteiligungs AG's DBAG Fund VII will buy a minority stake in the Italian hazardous liquid waste recycling company from Stirling Square's Third Fund.
* Carlyle will continue as the largest shareholder in Syniverse Technologies LLC upon completion of the mobile network services provider's deal to combine with blank-check company M3-Brigade Acquisition II Corp. at an initial enterprise value of $2.85 billion.
* Kohlberg & Co. LLC acquired Myers Emergency Power Systems LLC, which was a portfolio company of Graham Partners Inc.
FOCUS ON: REAL ESTATE
* KKR & Co. Inc. will sell a 14.5 million-square-foot industrial property portfolio to Oxford Properties Group Inc. for $2.2 billion.
* KKR- and KSL Capital Partners LLC-backed resort company Apple Leisure Group will be acquired by Hyatt Hotels Corp. for $2.7 billion, The Wall Street Journal reported.
* Property-focused private equity firms are among the potential suitors of Edison Properties LLC-owned storage provider Manhattan Mini Storage, which could be valued at over $3 billion, Bloomberg News reported, citing people with knowledge of the matter.