KKR Favorited in Simon & Schuster Buyout, Brookfield Acquires Duke Energy's Commercial Renewables Unit

KKR Favorited in Simon & Schuster Buyout, Brookfield Acquires Duke Energy's Commercial Renewables Unit

Private equity news for the week of June 19, 2023.

Insights

Chart of the Week: Private equity buyout deals are getting smaller. While private equity buyout activity has remained relatively resilient, the size of those deals continues to shrink. The average transaction size of buyouts globally in Q1 2023 fell to $90 million — a decline of -60% from the highs in 2021, and -27% from Q1 2019. (Read More)

New Research Report: The State of Private Equity Exits (Read)
Don't Miss: The State of Private Equity Buyouts (Read)

Deal News

KKR is reportedly in talks to buyout publisher Simon & Schuster. HarperCollins is also said to be in the running, although dealmakers are well-aware that a strategic acquisition will be difficult to close after regulators rejected Penguin Random House’s attempted takeover bid for Simon & Schuster in 2022. A valuation has not been disclosed publicly, but Simon & Schuster had a great year in 2022, topping $1 billion in sales for the first time as a standalone company, and operating income grew +16% to $248 million. The publisher’s audio and e-book operating groups both reported double-digit sales growth. (Source)

Brookfield Renewable, of Brookfield Asset Management, has agreed to acquire Duke Energy’s commercial renewables unit for $2.8 billion, which includes 5,900 megawatts of wind and solar farms, as well as a 6,100 megawatt development pipeline. The acquisition adds to Brookfield’s 90,000 megawatts of renewable energy assets currently in operation or under development globally. Duke Energy will now pivot to focus on its utilities business and improving grid reliability. (Source)

Blackstone has completed its acquisition of events software management provider Cvent in a $4.6 billion take-private deal. The offer was originally announced in March 2023, about a year after Cvent IPO’d via a SPAC under the guidance of then-sponsor Vista Equity Partners. Like many tech firms, Cvent’s public market valuation tumbled throughout 2022, making it a take-private target. Earnings were relatively strong for FY 2022 at $631 million, +22% growth YoY, and $113 million in adjusted EBITDA. (Source)

Industry News

TA Associates closed a $16.5 billion buyout fund for private equity investments. It’s a major accomplishment considering the slowdown in fundraising — especially for tech-focused funds. For comparison, Insight Partners recently issued a statement saying it would cut its fundraising target for a new fund from $20 billion to “over” $10 billion, and Tiger Global raised just $2.7 billion for what was supposed to be a $6 billion fund. TA’s focus on more mature tech companies (rather than high-growth startups) and the timing of exiting several large tech positions in 2021 and early-2022 (before the market downturn), was likely a major vote of confidence for LPs backing TA’s new fund. (TA Associates)

Permira has raised $4.6 billion for a new private credit fund. The fund will provide direct financing to mid-market companies across Europe. Private credit is booming right now, and Permira is one of the alternative asset managers that was early to jump on the trend more than 15 years ago. Its private credit platform has 3x’ed assets under management over the past five years alone. (Permira)

The Premier League of English football has amended its bylaws to ban any further investment from private equity firms. Carlyle Group, Ares Management, and Sixth Street had reportedly been exploring a bid for Manchester United, but those efforts now seem futile. Sports teams — and particularly European football clubs — have been a high-profile target of PE firms the past few years. Private equity invested $9.3 billion into European football clubs between 2021-2022. More recently, we’ve noticed more PE firms also trying to acquire the media rights to European football leagues, but that too is facing greater scrutiny by the team owners as Blackstone, Advent, and CVC Capital were recently denied a bid for the media rights to Deutsche Fussball Liga. (Private Equity News)

Marcelo Claure, SoftBank’s former chief operating officer, has launched his own Private Equity firm called Bicycle Capital. The firm’s first fund is looking to raise $500 million in capital, most of which has already been committed, and will be put toward investments in Latin America’s tech sector. Claure left SoftBank in 2022 following a disagreement about his pay package. (Bloomberg)

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