$19B Origin Energy Deal Receives Regulatory Approval, General Atlantic to Sell $3B Payments Company

Insights

Chart of the Week: The most frequent route to the role of Managing Director within Blackstone’s portfolio operations team involves an average of 16 years of industry operating experience; 19 out of 27 senior leaders in Blackstone’s operating team have followed this path. Among these 19 Managing Directors who transitioned from industry roles, 16 have experience in Fortune 500 companies like SAP, General Electric, Salesforce, and Unilever. Continue reading our profile of Blackstone's operating team >>

Recent Reports

• Western Europe Private Equity Report: Q2 2023
• North America Private Equity Report: Q2 2023
• Private Equity Exits Report: Q2 2023
• Private Equity Buyouts Report: Q2 2023

Deal News

The Australian Competition and Consumer Commission (ACCC) has approved the acquisition of Origin Energy by private equity firms Brookfield and EIG Partners in an $18.7 billion deal. The approval was complicated due to Brookfield's 45.4% stake in AusNet, a former ASX-listed Victorian energy transmission company, which brought up concerns about vertical integration in Victoria's electricity supply chain. While the ACCC acknowledged potential competition issues, they emphasized the deal's public benefits, particularly in accelerating Australia's shift to renewable energy. Brookfield has committed to investing $20bn to $30bn in renewable energy and storage by 2033 if the acquisition is finalized. Other approvals, including from the Foreign Investment Review Board, are still pending, and there's some shareholder resistance arguing the deal undervalues Origin Energy. (Source)

General Atlantic is considering selling its 54% stake in EngageSmart Inc, a payments software company valued at $3.3 billion. Goldman Sachs Group and Evercore are brokering the deal with multiple buyout firms reportedly lining up to place initial bids. EngageSmart, based in Braintree, Massachusetts, offers software solutions facilitating customer operations such as bill payments. The company recently posted a 28% YoY increase in Q2 revenue, reaching $94.4 million. Despite this growth, concerns about potential slowdowns in consumer spending have affected EngageSmart's stock performance. General Atlantic purchased a majority stake in EngageSmart, formerly Invoice Cloud, in 2018. EngageSmart went public in 2021, raising $378 million in its IPO. (Source)

Private equity firms Blackstone, EQT AB, and THL Partners are vying against major U.S. industrial automation companies, including Emerson Electric Co, Keysight Technologies Inc, and Fortive Corp, to acquire German power electronics company EA Elektro-Automatik. The Viersen-based firm, owned by Bregal Investments, is expected to be valued between $1.5 billion and $2 billion based on EBITDA of approximately $100 million. EA Elektro-Automatik has been exploring a sale since earlier this year, having received initial bids in September. The company specializes in equipment that supports high-tech manufacturing across sectors such as automotive, energy storage, telecommunications, and aerospace. (Source)

Blackstone invested over $1 billion in Candle Media, cofounded by ex-Disney execs Kevin Mayer and Tom Staggs in 2021, but the company’s earnings will fall short of expectations by 50% this year, according to a Bloomberg report. The company spent $4 billion purchasing other entertain companies specializing in content for various audiences. However, due to reduced spending from major Hollywood studios and market shifts, Candle Media's anticipated earnings for the year is between $140 million and $170 million, below earlier projections. Both Mayer and Staggs are advising Disney on the side, but remain confident in Candle's prospects, and continue to explore potential deals backed by Blackstone. (Source)

Industry News

MIT’s $23.5 billion endowment, one of the largest among US private colleges, reported a 2.9% loss for the fiscal year ending in June. The endowment lagged other universities due to its higher-than-average allocation toward venture capital investments. (MIT)

For the first time since 2015, we have yet to witness a China-focused private equity fund raise more than $5 billion. The largest fund raised in the Greater China sub-region this year was Warburg Pincus’s RMB Fund, which raised $3 billion. It’s a sign that investors have grown wary of investments in China. (PitchBook)

Blackstone is trying to recover a €200 million loan it gave to Bain Capital to try to save Italian tire manufacturer, Fintyre. The company ended up going bankrupt, and now there’s an investigation into potential claims by Fintyre’s directors, including Bain Capital, leading up to the insolvency. (Financial Times)

KKR’s co-head of European private equity Philipp Freise says portfolio operations will become a bigger focus for buyout firms seeking differentiation in a higher interest rate environment — which he expects for several years. (Bloomberg)

Lightyear Capital’s Tom Naratil says there are better exit opportunities in private markets than by going public, which will keep buyout firms robust but likely result in fewer IPOs. (Bloomberg)

European asset manager Carmignac, has named Edouard Boscher head of its private equity practice. Boucher will be based in Paris and report to CEO Maxine Carmignac. (Pensions & Investments)

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