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Onex's jumbo deal; PAI-backed JV to buy Nestlé's US ice cream unit

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

Cleared for landing

Onex Corp. landed the largest private equity aviation deal in history this week, closing its C$5 billion acquisition of Canadian airline WestJet Airlines Ltd. It struck the deal in May and jumped its final regulatory hurdle on Tuesday, when the Canadian Transportation Agency gave it clearance. Onex is not the only firm to have invested in an airline this year. Cartesian Capital Group LLC paid $50 million for a stake in low-cost airline Viva Air Group in May.

But for private equity firms, there is more to aviation than airlines alone. Carriers are largely dependent on aircraft leasing, and leasing companies are attractive investment propositions because, unlike traditional private equity investments which are, in the short term, at the mercy of the profitability of portfolio companies, they offer a stable stream of income at a higher frequency each year. They are also expanding due to the rise in low-cost carriers and passenger traffic.

Apollo Global Management Inc., KKR & Co. Inc. and Investec Asset Management Ltd. are among the firms with growing interests in aircraft leasing. Apollo, a long-time market participant, launched its first dedicated aviation fund, Apollo Navigator Aviation Fund I LP, in September, and in January KKR formed a partnership with leasing broker Altavair AirFinance through which it will invest $1 billion in cargo and commercial planes. Investec, which has had an aviation finance franchise since 2002, appointed a global head of the division earlier this year, who will oversee its aviation equity and debt funds.

Of course investor appetite is crucial to the success of these strategies and that too was evident this week; it emerged that Teachers' Retirement System of Louisiana committed $75 million to an aviation fund managed by Castlelake LP, an alternative asset manager with a dedicated aviation-focused unit. The U.S. public pension fund also invested in the fund’s predecessor, a $1 billion vehicle that invests in younger mid-life aircraft on contractual operating leases.


* Froneri, an ice cream-focused joint venture between PAI Partners and Nestlé, will acquire the Swiss food giant's U.S. ice cream business for $4 billion. The deal is set to close in the first quarter of 2020, pending regulatory approvals.

SNL ImageNestlé's headquarters in Vevey, Switzerland.
Source: AP Photo

Consumer conquests

* Apollo Global Management Inc. made an approximately $4.3 billion bid for the powertrain division of automotive-parts maker Tenneco Inc., which is likely to reject the offer, The Wall Street Journal reported, citing people familiar with the matter.

* Australia's could participate in the roughly €2.3 billion auction for Scout24's car trading business AutoScout24, while shortlisted suitors Permira, Hellman & Friedman and Apax Partners were expected to submit their bids by the deadline scheduled for the week of Dec. 9, the Financial Times (London) reported, citing people close to the auction.

TMT targets

* Francisco Partners Management LP and hedge fund Elliott Management Corp. are in advanced talks to buy workplace software provider LogMeIn Inc. for more than $4 billion, people familiar with the matter told Bloomberg News.

* Bain Capital LP is nearing a deal to purchase a stake in Rome-based IT service provider Engineering Ingegneria Informatica, which could be valued at more than €1.5 billion, from Apax and NB Renaissance Partners, Reuters reported, citing four sources familiar with the matter.

* An investor group including OMERS is in advanced discussions to buy a 40% stake in Altice Portugal's fiber network business, Telecompaper reported, citing sources mentioned by Bloomberg.

* McAfee LLC joins Permira and Advent International Corp. in a race to purchase cybersecurity software peer NortonLifeLock Inc., The Wall Street Journal reported, citing people familiar with the matter.

SNL ImageThe Blackstone Group sign stands in front of their offices.
Source: AP Photo

Exit zone

* Centerbridge Partners LP is looking to sell U.S. managed vision care benefits company Versant Health at a more than $2 billion valuation, including debt, Reuters reported, citing people familiar with the matter.

* Vivo Capital is exploring a sale for medical-device maker Surgical Specialties Corp., which could cost more than $500 million, Bloomberg reported, citing people with knowledge of the matter.

* Advent, Bain and GIC are negotiating a full or partial sale of their combined 30% stake in Singaporean engineering service provider Quest Global, The Economic Times (India) reported, citing multiple sources. The consortium is also exploring a possible U.S. IPO for the company.

Flush with cash

* The Blackstone Group Inc. has collected about $15 billion across three European-focused private equity funds.

* Leonard Green & Partners LP pulled in $14.75 billion across its latest flagship fund and its first middle-market fund.

* Kohlberg & Co. is planning to raise $3 billion for its latest investment vehicle, Private Equity News reported, citing a public pension document.

* PCP Managers LP, or Parthenon Capital, secured over $2.0 billion for Parthenon Investors VI LP.

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