DJ PE Daily: Lexington Weighs a Sale | Percheron Banks $770 Million | Calpers Aims to Diversify | Triago's Swain on Deals
2021 Dow Jones & Company, Inc.
Good day. The deal deluge rolls on, so let's jump right in.
The Wall Street Journal's Miriam Gottfried and Cara Lombardo report that Lexington Partners has hired Goldman Sachs to advise it on a possible sale of itself, at a value of a few billion dollars, citing people familiar with the matter. Lexington would follow several previous deals involving larger private-equity firms, including some that combined or went public in recent months.
As for the pace of deals, our Laura Kreutzer spoke with Triago's Matthew Swain, a managing partner, who said the number of transactions this year is off the charts.
In fundraising news, our Preeti Singh and Laura Cooper report that a new entrant, Percheron Capital, bagged $770 million for its debut fund. And it took only about eight months.
Finally, Preeti provides a look into private-equity performance issues confronting public pension giant Calpers, which is betting on diversification to improve results. We have all these and many more stories condensed and linked for you below, so please wade in ...
Today's Top Stories
Secondary specialist Lexington Partners is exploring a sale of its business, part of an increasingly popular niche of the red-hot private-equity industry, Miriam Gottfried and Cara Lombardo report for The Wall Street Journal, citing people familiar with the matter. Closely held Lexington, which focuses on buying secondhand stakes in private-equity funds, has hired Goldman Sachs Group Inc. to advise on a potential sale, which could value the firm at a few billion dollars, some of the people said. KKR & Co. and other large private-equity firms are said to be among potential bidders.
Percheron Capital, co-founded by two former Golden Gate Capital deal makers, has wrapped up its debut fund with $770 million, Preeti Singh and Laura Cooper report for WSJ Pro Private Equity. The new firm, whose legal name is Percheron Investment Management LP, said it completed fundraising for Percheron Capital Fund I LP in eight months.
Paris-based Triago, which advises on secondary deals, primary fundraising and direct investments, has promoted Matthew Swain to managing partner and co-head of the Americas for the firm. WSJ Pro Private Equity's Laura Kreutzer recently spoke to Mr. Swain about his take on the dramatic rebound in deal activity this year.
The nation's largest state pension system is betting that more co-investments and better diversification can help improve the long-term performance of its private-equity program, which has fallen short of its return benchmarks, Preeti Singh writes for WSJ Pro Private Equity. Private-equity returns for the more than $460 billion California Public Employees' Retirement System, or Calpers, improved across all time periods in the first half of this year. But they underperformed against the system's policy benchmark, driven by "a lack of consistency, a lack of diversification and a lack of cost-efficiency," according to Greg Ruiz, managing investment director, private equity at the pension system.
The amount, equivalent to EUR216 billion, of assets under management by private capital firms in France at the end of last year, according to the 2021 Alternative Assets in Europe Report from Preqin Ltd. and Amundi Asset Management
A Carlyle Group Inc.-backed re-insurer, Fortitude Group Holdings LLC, has agreed to buy a major chunk of Prudential Financial Inc.'s in-force legacy variable annuities in a deal valued at about $2.2 billion, Colin Kellaher reports for Dow Jones Newswires. The transaction would shift Prudential Annuities Life Assurance Corp. and its $31 billion of in-force annuities to Fortitude Re, as the Bermuda-based reinsurer is called, in exchange for $1.5 billion in cash. Newark, N.J.-based Prudential will continue to serve as the administrator of the annuities involved, which were all issued before 2011. The deal is expected to close in next year's first half and will result in a $290 million reduction in Prudential's pre-tax annual adjusted operating income. The insurer said the total value of the deal also includes a capital release and an expected tax benefit. Last year, Carlyle and T&D Holdings Inc. acquired a majority stake in Fortitude from insurer American International Group Inc. for roughly $1.8 billion.
KKR & Co. has bowed out of the running to acquire German online pet-supply retailer Zooplus AG on Wednesday, after Hellman & Friedman a few days earlier raised its offer to take the Munich-based company private to EUR460, or about $543.28, a share from the EUR390 offered in August. The San Francisco buyout shop's latest offer values the Munich-based company at about EUR3.54 billion. KKR had indicated interest in bidding for the company before Hellman & Friedman raised its offer.
Platinum Equity is acquiring pet kennel and dog chew maker Petmate, whose legal name is Doskocil Manufacturing Co., from Olympus Partners. The Arlington, Texas-based company also makes and markets dog houses and toys, food storage containers and pet bedding, with its products distributed by major retailers and online sites. Platinum expects to help the company expand, both organically and through acquisitions. Olympus first backed the company in May 2017, according to its website.
CVC Capital Partners is joining Carlyle Group Inc. in backing accounting and advisory services provider Corporate Finance Group Inc., investing in the Boston-based company at an enterprise value of about $1.85 billion, according to a press release. The company's more than 650 professionals serve over 2,500 clients.
Bridgepoint Group PLC is backing supply-chain management company Blume Global Inc., valuing the business at about $500 million. The London firm joins Apollo Global Management Inc. and EQT AB in backing the Pleasonton, Calif.-based cloud-based software company.
L Catterton and HPE Growth joined a $177 million Series C investment in European e-commerce logistics company Sendcloud BV led by SoftBank Group Corp.'s Vision Fund 2, according to an emailed news release. The Eindhoven, Netherlands-based company provides shipping services to online merchants, with more than 300 employees who work with over 23,000 sellers and 80 carriers.
KKR & Co. has acquired self-storage sites in the Atlanta, Phoenix and Orlando, Fla., markets with 3,884 units in all, paying a total of roughly $92 million to two sellers for the five properties involved. All the units were built or renovated within the past five years, according to a news release. The New York firm invested through its Americas opportunistic equity real estate strategy.
Salt Creek Capital announced the acquisition of Endural LLC, a Costa Mesa, Calif.-based company that designs and manufactures thermoformed material handling containers that are typically used to transport large industrial items.
Decarbonization specialist Carbon Direct Capital Management in New York has invested EUR15 million, or about $17.7 million, in Calix Ltd., acquiring a nearly 7% stake in the Leilac Group subsidiary of the publicly traded technology company based in Australia, according to an emailed news release. The unit is developing Calix's carbon-dioxide capture technology. The deal also will deliver 30% of the royalties from Leilac deployment of the technology to Carbon Direct.
Seattle-based private-equity firm Pike Street Capital said it has invested in PumpTech Inc., a Bellevue, Wash.-based company that distributes pump, process and environmental products and services.
ARC Financial and BDC Capital are backing photovoltaic module manufacturer Silfab Solar Inc., according to a news release. Co-investors in the Mississauga, Ontario-based company include Ontario Power Generation Inc.'s pension plan.
Sagewind Capital is backing healthcare consulting firm Federal Advisory Partners in Arlington, Va. The business focuses on working with public and private-sector organizations and the federal healthcare system, including the Veterans Health Administration.
Digital infrastructure investor SDC Capital Partners has acquired a majority interest in internet services provider IQ Fiber LLC. The Jacksonville, Fla.-based company is building a fiber-optic network to connect residential customers to broadband services.
Frazier Healthcare Partners led a $91 million investment in publicly traded immunotherapy company Alpine Immune Sciences Inc. Frazier invested from its Frazier Life Sciences Public Fund. Other participants included Decheng Capital, BVF Partners and TCG. The fresh capital is expected to help the clinical-stage company develop treatments for cancer and autoimmune and inflammatory diseases.
Thomas H. Lee Partners has invested in asset finance software supplier Odessa Inc. The Philadelphia-based company specializes in auto and equipment lease financing.
CenterGate Capital is backing frozen-foods maker Teeny Foods Corp. The Portland, Ore.-based company makes pastries filled with ingredients like cheese, fruit and meats.
GIC-backed Pagaya Technologies Ltd. is going public through a merger with a special-purpose acquisition company that values the financial-technology startup at about $9 billion, Amrith Ramkumar reports for The Wall Street Journal, citing the companies. Pagaya operates an artificial-intelligence network to make financial transactions like lending more efficient and give more people the ability to borrow. Banks and other financial-services providers use its platform, which analyzes troves of data to help partners serve more customers.
Taiwan's Gogoro Inc. will go public in the U.S. via a special-purpose acquisition vehicle merger with Poema Global Holdings Corp. that values the battery-swapping pioneer at more than $2.3 billion.
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September 16, 2021 09:23 ET (13:23 GMT)