Blackstone Closes $9.7B Investment in Emerson Electric's HVAC Business, SurveyMonkey Owner Acquired at Discount

Blackstone Closes $9.7B Investment in Emerson Electric's HVAC Business, SurveyMonkey Owner Acquired at Discount

Private equity news for the week of June 5, 2023.


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Insights

Chart of the Week: Private equity buyers were more active in the beginning of 2023 than preceding quarters, but the average deal size continues to shrink. There were 1,461 buyouts globally in Q1, down -23% YoY but up +29% QoQ and still well above pre-pandemic levels. The total value of those deals was $132.8 billion, down -47% YoY but up +10% QoQ. Read more from our recent Private Equity: Buyouts report.

Deal News

Blackstone completed its $9.7B acquisition of a majority stake in Emerson Electric’s climate technology business, which recently rebranded to Copeland. The investment values Copeland at $14B on $5B in revenue for FY 2022. The company manufactures HVAC products, including compressors, controls, thermostats, valves, and monitoring solutions for residential, commercial, and industrial end user applications. (Source)

KKR is acquiring industrial machining manufacturer Circor in a $1.6B take-private deal, representing a +55% premium to the company’s closing stock price last Friday. Circor reported $803M in FY revenue trailing four quarters, up mid-single digits YoY. Investors have been bullish on the company’s forward guidance with its stock price up +45% YoY even prior to the KKR takeover being announced. Circor specializes in flow-control products, such as pumps, valves, compressors, and meters for the oil & gas, industrial, defense, and aerospace industries. The company reportedly started exploring a sale in March 2022. (Source)

Symphony Technology Group closed its $1.5B take-private deal to acquire Momentive, the owner of SurveyMonkey. Recall that just last year Momentive was almost acquired by Zendesk for $4.1B, showing just how far tech valuations have fallen. Activist investor Jana Partners convinced Zendesk’s shareholders to walk away from that deal. Momentive reported $481M in revenue for FY 2022, +8% growth vs 2021. (Source)

Canadian pension fund CPP Investments is exploring the sale of $2B worth of private fund stakes, half of which is private equity assets. (Source)

Neuberger Berman acquired a minority stake in Mavis Tire Express Services for an undisclosed amount. Mavis is actually already PE-owned. BayPine LP and TSG Consumer Partners acquired the company in 2021 at a reported $6B valuation. Mavis operates a network of 882 auto service centers in the US. (Source)

Industry News

French PE firm ARCHIMED closed a $3.8B healthcare-focused fund called MED Platform II. The fund will target 14 buyout deals in the European and North American mid-cap healthcare industry. ARCHIMED faces competition for deals however, as healthcare was the third most-active sector for buyout activity in Q1 2023, according to our recent Private Equity: Buyouts report. (Archimed)

KKR has promoted Managing Director Prashant Kumar to lead the firm’s Southeast Asia private equity business which is based out of its Singapore office. KKR raised a $15B fund to invest in SE Asia in 2021. (Reuters)

Meanwhile, KKR’s Global Head of Private Wealth, Todd Builione, has accepted a new job as Head of North America at hedge fund Marshall Wace. Builione helped lead a deal where KKR acquired a 25% stake in Marshall Wace in 2015. The hedge fund currently manages $62B in assets. (Financial Times)

The WSJ investigates why fewer private equity professionals are pursuing MBA degrees. The combination of opportunity costs and PE firms promoting associates without their MBAs has led to fewer business school applications from the industry. (Wall Street Journal)

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