ESPN Attracting PE Interest, Goldman's $1.7B Take-Private EdTech Deal, CVC Acquires Philippine Hospital Network

ESPN Attracting PE Interest, Goldman's $1.7B Take-Private EdTech Deal, CVC Acquires Philippine Hospital Network

Private equity news for the week of July 17th, 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)

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The State of Private Equity Exits (Read)

The State of Private Equity Buyouts (Read)

Deal News

Disney CEO Bob Iger said in an interview with CNBC that the company is in talks to sell a significant stake in ESPN. Disney is looking for a partner to provide capital that will help ESPN transition to a direct-to-consumer strategy. A new report from Sports Business Journal suggests that private equity is the most likely suitor — specifically, KKR, Apollo, or Candle Media. Others have theorized that tech companies like Amazon, Netflix, or Apple are more likely suitors, but sources from within the media industry say Iger is less likely to allow an industry peer take a stake in ESPN who competes directly against its Disney+ streaming service. (Source)

Goldman’s private equity arm has agreed to acquire edtech company Kahoot in a $1.7 billion take-private deal. Several existing backers, including General Atlantic and LEGO Group’s KIRKBI Invest, joined Goldman for the buyout. The company’s stock price is down -77% from its 2021-highs, but operating metrics have remained strong since the COVID-19 pandemic, making it an attractive buyout target. Kahoot’s revenue totaled $146 million in FY 2022, up +60% vs prior year, and adjusted EBIDTA was $30 million, up +57% YoY. The online learning platform surpassed 1.3 million paid subscription in Q4 2022. (Source)

CVC Capital Partners has agreed to acquire a majority stake in Philippine hospital network The Medical City for $276 million. With the investment, CVC will control a 60% stake and 8 of the 15 board seats. The Medical City is one of the largest private hospital networks in the Philippines, with 6 hospitals and more than 50 health clinics. CVC, which has experience investing in hospital chains in Indonesia, Vietnam, and India, says its capital will help The Medical City continue expanding throughout SE Asia. (Source)

Industry News

US regulators are considering an increase to capital requirements for banks with at least $100 billion in assets. Jamie Dimon says the heightened rules would target the largest banks but ignore the risks posed by “shadow banks,” referencing private equity and private credit. “Apollo and Blackstone [will be] dancing in the streets,” quipped Dimon. (CNBC)

Although many private equity firms are becoming bigger players in private credit, Swedish firm EQT is doubling-down on traditional private equity, real estate, and infrastructure. “We don’t have any plans to enter into new asset classes like credit at this point in time,” says EQT CEO Christian Sinding. (Bloomberg)

Fundraising for private equity funds declined for the third-straight quarter. There was $315.5 billion raised across 508 funds in the first-half of 2023. Of that capital raised, about half was for buyout funds, 20% for growth equity, and 18% for venture capital. The 10 largest funds raised 35% of all fundraising capital, led by Blackstone, Permira, and TA Associates. (Private Equity International)

Korea’s Centroid Investment Partners has seen its assets under management grow from $65 million in 2018 to $2.1 billion today by catering to investors who want exposure to the golf industry. “We believe the pandemic accelerated the growth of golf, just like remote working and virtual communication,” says Centroid Chairman Jinhyeok Jeong. Some of Centroid’s investments include buying-out golf equipment manufacturer TaylorMade in 2021, acquiring prestigious Korean golf course South Spring Country Club, and taking a stake in US golf club operator Concert Golf. (Forbes)

Musical artists are following Taylor Swift’s lead in re-recording their own songs after the rights are sold to private equity firms. There are generally two types of music rights: publishing rights and recording rights. PE firms typically acquire publishing rights, allowing artists to re-record original masters. However, now some firms like Blackstone, are adding provisions to music deals that prohibit artists from re-recording songs they’ve acquired the rights to. (The Ringer)

KKR Partner Tim Franks is leaving the firm. Franks was most-recently head of private equity for the UK and Ireland. Previously, he ran KKR’s buyouts team for the consumer sector across Europe, Middle East, and Africa. (Bloomberg)

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