Permira Acquires Luxury Goods Manufacturer, CVC Capital Fails to Expand Media Rights in European Football
Private equity news for the week of May 29, 2023.
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Insights
Chart of the Day: Technology continues to be the fastest-growing sector for private equity buyouts, according to analysis by the Value/Add research team. The sector — which includes computer software, computer hardware, semiconductors, and telecom hardware — accounted for $64.1B worth of private equity acquisitions globally in Q1 2023, 48% of the value of buyouts across all sectors. That’s up from FY 2022, when technology accounted for 37% of all buyout dollars, and 22% in FY 2021. (Read More)
Deal News
Permira has acquired Italian luxury goods manufacturer Gruppo Florence at a valuation of $1.1B. Just last month the company was said to be weighing an IPO. The manufacturer generated $642M in revenue last year from making designer clothes, shoes, and accessories for top fashion brands. Gruppo Florence was founded in 2020 to consolidate the highly fragmented luxury goods supply chain. Since then the company has merged 26 firms across the industry to become one of the world’s largest leather goods manufacturers. The current management team will stay in place, including founder and former-Bulgari CEO Francesco Trapani. (Source)
Blackstone, Advent International, and CVC Capital Partners have failed to acquire a 12.5% stake in the media rights for Deutsche Fussball Liga (DFL), which operates Germany’s premier football league Bundesliga. More than one-third of the league’s clubs were against taking private equity investment, which was enough dissent to put an end to discussions. CVC Capital Partners already owns media rights to France’s Ligue 1 and Spain’s La Liga. (Source)
Last week we reported that TPG and Francisco Partners were in talks to acquire software firm New Relic in a $5B take-private deal, but negotiations have since fallen apart. The buyers could not secure enough debt financing for the deal — yet another example of just how risk-adverse banks have become in today’s market. New Relic has been exploring a sale since July 2022, after being targeted by activist hedge fund Jana Partners. (Source)
Brookfield Asset Management is interested in selling IT services firm Everise at a valuation of approximately $1.3B. Brookfield acquired the company for $450M in 2020. Several PE firms have expressed interest, including Blackstone, BPEA EQT, KKR, Carlyle Group, Apax Partners, and Warburg Pincus. Everise has 16,000 employees across offices in 8 countries, and is expected to post $500M in revenue this year. (Source)
Industry News
French PE firm Ardian, which has approximately $150B in assets under management, plans to double the headcount of its Abu Dhabi office from 15 to 30 this year. The firm opened the office just six months ago, following a $6B LP investment from sovereign wealth fund, Abu Dhabi Investment Authority. (Bloomberg)
We’re seeing more PE firms exercise follow-on offerings for portfolio companies that IPO’d over the past two years, even if the shares are priced at a discount to the initial offering. PE-backed follow-on offerings are up 180% YoY in the US, and nearly two-thirds of such deals were priced below the portco’s IPO price. Blackstone, Apollo Global Management, and Vista Equity Partners are some of the firms that have sold such stakes. It’s a sign that PE firms don’t expect valuations to return to recent highs anytime soon. (Financial Times)
S&P Global Ratings has downgraded SoftBank’s credit rating from “BB+” to “BB” — otherwise, known as “speculative grade,” which means there’s increased doubt in SoftBank’s ability to meet its financial obligations. The firm filed a $39B loss in 2022, following a $27B loss in 2021. We reported two weeks ago that SoftBank was trying to clean-up its balance sheet by selling several assets including its early-stage VC arm SoftBank Ventures, UK chipmaker ARM, US investment firm Fortress Investment Group, and a hefty stake in Chinese eCommerce firm Alibaba. (CNBC)
Meanwhile, SoftBank may launch a new private credit business that will lend to late-stage startups. It’s part of a broader shift we’ve been talking about for several months about private equity filling the void in lending left by risk-adverse banks in today’s market. (Reuters)
Virginia Governor and former Carlyle Group co-CEO Glenn Youngkin is reconsidering making a run for the 2024 GOP presidential nomination. (Axios)
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