Bain's $5B Acquisition of Consultancy Guidehouse, Platinum Equity Acquires Kohler's $3B Industrial Business
Private equity news the week of November 6th, 2023.
Recent Insights
Chart of the Week: While North America accounts for the largest share of global healthcare private equity buyouts, the pace of these buyouts is accelerating more quickly in Western Europe. From Q3 2013 to Q3 2023, healthcare private equity buyouts in Western Europe grew by 9.6x, compared to a 5.6x increase in North America. (Read More)
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Deal News
EQT AB has revived negotiations to acquire Global Switch Holdings Ltd, with the potential deal valuing the data center operator at approximately $6.5 billion. After previous discussions were disrupted over valuation differences, EQT is now in talks with Global Switch's Chinese owners, Jiangsu Shagang Group and Avic Trust. An acquisition, still subject to due diligence, could occur within months. Global Switch's stakeholders have considered various exit strategies since 2019, including an IPO and separate sales of European and Asia-Pacific divisions. (Source)
Bain Capital has agreed to acquire Guidehouse, a consultancy known for advising government agencies, for $5.3 billion. The company reportedly reached $5.5 billion in revenues last year thanks to growth in its consulting business which specializes in defense, security, energy, infrastructure, sustainability, healthcare, and financial services. Guidehouse, currently owned by Veritas Capital since 2018, has scaled in recent years through a series of acquisitions, including Navigant and parts of Dovel Technologies and Grant Thornton's advisory. (Source)
Platinum Equity will acquire Kohler’s generator business unit, now named Kohler Energy. An acquisition price was not disclosed, but earlier reports suggested the deal would exceed $3 billion. Kohler is still a family-owned business, led by CEO David Kohler, with a history dating back to 1873. The spin-off will help Kohler focus on its core kitchen and bath products business, while Platinum will take Kohler Energy further into the industrial market. (Source)
Ascendent Capital Partners, a private equity firm specializing in China, has launched a $1.6 billion bid to acquire Hollysys Automation Technologies Ltd.. Hollysys, an industrial automation and rail transport solutions provider in China and Asia, has been the target of multiple takeover attempts, including a previous bid by Ascendent in 2021. (Source)
Industry News
Blackstone is gearing up for heightened activity in India and Japan, expecting them to be the primary markets in Asia for next year's private equity capital allocation. India's rapid growth and dynamic stock market make it particularly attractive, while Japan's economy, interestingly decoupled from global trends, also presents lucrative opportunities. Despite a challenging environment for private equity with slowed deal-making, Blackstone's Joe Baratta indicates a robust pipeline and interest in deals ranging from $300 million to over $2 billion, particularly in IT, healthcare, and consumer sectors. (Bloomberg)
Audax Group has launched a countersuit against H.I.G. Capital, alleging breach of contract, following H.I.G.'s earlier lawsuit claiming Audax committed fraud during the sale of a majority stake in Mobileum. This legal clash is unusual in the private equity world where disputes are typically resolved privately. The core of the conflict lies in the $915 million deal and allegations of inflated revenues by Audax, which they deny. Audax's countersuit also addresses H.I.G.'s exclusion of Audax from decision-making processes and investigations, despite being a minority stakeholder with board representation. Both firms are standing firm, with no signs of retreat, in a case that could have far-reaching implications for private equity litigation norms. (Axios)
KKR has successfully raised $2.8 billion for its second global impact fund, focused on sustainable and equitable investments. This fund, which is more than double the size of its predecessor from 2020, aligns with the United Nations' sustainable development goals. KKR's global impact team, which has expanded significantly since 2018, has already invested in projects promoting energy efficiency, recycling, education, and economic opportunity, demonstrating a strong commitment to creating social and environmental value alongside financial returns. (KKR)
Rubicon Technology Partners, a private equity firm specializing in enterprise software, has closed its fourth fund, Fund IV, at $1.7 billion, a 34% increase from its previous fund. The new fund has already made two platform investments in the Senior Living and CPQ SaaS sectors. (Rubicon Technology Partners)
Jon Judah, global chief strategy officer at marketing agency Huge, says private equity firms are partnering with more agencies to help with business transformation in portfolio companies. In a higher-interest rate environment, PE firms are expected to rely more heavily on true operational improvements to drive financial returns. Agencies can help with these efforts in several ways including brand building, customer acquisition, and updating a company’s marketing tech stack. (Adweek)
Private equity funds are increasingly establishing a presence in the Gulf region, aiming to leverage the wealth of local sovereign funds and families. As global fundraising declines, the Gulf's capital is becoming crucial, especially for investments aligned with the region's economic diversification and post-oil future. Firms like Ardian and Brookfield are expanding their local operations, with Saudi Arabia's Public Investment Fund emphasizing the importance of on-the-ground presence for foreign investors. (Reuters)
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