Apollo Takes Stake in PetSmart, Bain Acquires Distressed Financial Firm, KKR's $1.3B Industrial Buyout
Private equity news the week of July 24th, 2023.
Insights
Chart of the Week: On a full-year basis, we expect both PE exit volume and exit value to be down significantly this year. We are forecasting $197 billion in PE exits globally for 2023 across 868 deals. At those numbers, exit value will be down -57% from 2022 and exit volume down -46%. For context, that’s the lowest PE exit activity in over five years. (Read More)
Don't Miss:
The State of Private Equity Exits (Read)
The State of Private Equity Buyouts (Read)
Deal News
Apollo has agreed to acquire a minority stake in PetSmart for an undisclosed amount. KKR was previously in talks to take the retailer public via a SPAC deal valued at $14 billion. BC Partners and Singapore sovereign wealth fund GIC — both of which acquired PetSmart for $8.7 billion in 2015 — will retain majority ownership in the deal with Apollo. The retailer’s sales have grown +40% since the 2015 buyout, driven by increased spending in the pet care category and the expansion of PetSmart’s private label brands. (Source)
Bain Capital has agreed to acquire a 90% stake in Adani Capital and Adani Housing, the non-bank lending and real estate arms of Adani Group. Deal terms were not announced, but local news sources in India reported the buyout was $180 million plus $120 million in additional capital investment. Adani Capital was originally seeking an IPO at a $2 billion valuation in 2024, but the firm’s parent company, Adani Group, has been subject of a short-seller report from Hindenburg Research. (Source)
KKR will acquire industrial manufacturer Chase Corp in a $1.3 billion take-private deal. The deal is valued at 13x EBITDA and 4x 2022 revenues. Sales were up +11% last year, and the company’s stock is up +42% YTD this year. Chase Corp manufactures adhesives, industrial tapes, and corrosion protection materials — categories which are expected to benefit from the US infrastructure spending bill. (Source)
Blackstone has agreed to sell self-storage operator Simply Self Storage for $2.2 billion to strategic acquirer Public Storage. Blackstone says the deal will generate $600 million in profit for the firm’s REIT — a comment likely intended to calm real estate investors. Simply Self Storage operates 127 properties, located primarily in the southeast United States. (Source)
Industry News
Blackstone became the first private equity firm to surpass $1 trillion in assets under management. (New York Times)
CVC Capital Partners closed $29.2 billion for a new buyout fund. It’s the largest-ever fundraise for a buyout fund, excluding the $30.4 billion raised by Blackstone for its real estate fund earlier this year. (CVC Capital Partners)
Meanwhile, Bain Capital has raised $1.2 billion for a new buyout fund dedicated entirely to investments in the insurance industry. (Reuters)
Private equity “dry powder” has swelled to $2.5 trillion globally as of July 2023 — the largest amount of capital the industry has ever sat on ready to be deployed for private markets. (S&P Global)
US regulators are cracking down on private equity “roll-ups.” FTC Chair Lina Khan said the agency would be scrutinizing funds that target a series of acquisitions in a single industry with the intent of consolidating a significant share of the market. (MarketWatch)
Sovereign wealth funds are becoming bigger co-investors in private equity deals. Such funds spent $17.2 billion in co-investments during the first-half of 2023, up 24% vs last year. (Bloomberg)
Guy Hands will retire and step down next month as chairman of the buyout firm he founded, Terra Firma Capital Partners. (Financial Times)
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