Permira and Blackstone Target $12B Takeover of Classified Ads Giant, KKR-backed BrightSpring Health Refiles IPO

Permira and Blackstone Target $12B Takeover of Classified Ads Giant, KKR-backed BrightSpring Health Refiles IPO

Private equity news for the week of September 25th, 2023.

Insights

Chart of the Week: Technology continues to see the most buyout activity in Western Europe compared to other sectors, accounting for 27% of total buyouts in the region in Q2 2023. Technology started accounting for a larger share of buyouts in 2021, as the sector started experiencing a major downturn. Venture capital funding pulled back quickly, which led to private equity stepping in to meet the needs of capital deployment in the sector. (Read More)

Recent Reports

Deal News

European classifieds company Adevinta ASA's shares surged by 24% on news of a non-binding private equity takeover proposal from a consortium led by Permira and Blackstone, marking one of the year's largest potential buyouts and giving Adevinta a market value of about $12.1 billion. Although discussions are in the initial phase with no guarantee of a final offer, the significant jump in share and bond prices reflect investor optimism. Adevinta's portfolio spans various countries, including ownership of Leboncoin in France and Mobile.de in Germany. Key stakeholders eBay Inc. and Schibsted ASA have expressed support for the proposal, intending to retain part of their current stakes if the deal proceeds. (Source)

KKR-backed BrightSpring Health Services Inc. has refiled for an IPO with the intention of raising $1 billion. The home and community-based healthcare services provider is planning a listing for the fourth quarter. Goldman Sachs Group Inc. and KKR’s capital markets division have been re-engaged as lead bookrunners for the offering. Additional banks involved include UBS AG, Leerink Partners LLC, and several others. Though KKR and BrightSpring have not finalized the details and timing, and plans may still change, the move comes as the market for new listings shows signs of revival. BrightSpring, which serves 350,000 patients daily across 50 states, had previously paused its listing plans in November 2021 due to unfavorable market conditions for new listings. (Source)

Genstar Capital is reportedly exploring a sale of manufacturing group TekniPlex, potentially valuing the company at over $4 billion. The San Francisco-based private equity firm is said to be in the early stages of an auction process, working alongside an adviser to gauge interest from potential buyers, including other private equity firms and industry peers. Although deliberations are ongoing, no final decisions have been made, and Genstar may choose to retain ownership of TekniPlex. Both companies have not officially commented on the matter. Genstar, which acquired TekniPlex in 2017, has actively supported its expansion, backing acquisitions such as M-Industries and Grupo Phoenix under CEO Brenda Chamulak. TekniPlex, a global employer of over 7,000 individuals, operates in the healthcare and consumer sectors, holding brands like Tri-Seal and Dolco. (Source)

Private-equity firm GEC has secured $214 million for a fund dedicated to maintaining its ownership in Estis Compression, a high-pressure artificial-lift service provider for oil-and-gas entities, while permitting co-investors to exit. Kline Hill Partners is the principal investor in this continuation fund. This move allows GEC to acquire a 32% stake in Estis that was owned by co-investors, keeping the remaining 68% stake within its Fund III. Estis Compression, specializing in manufacturing compression equipment to enhance oil and gas production, stands as a significant player in the growing $12.1 billion artificial-lift systems market. Jonathan Fairbanks, founder and managing partner at GEC, expresses confidence in Estis’s technology, forecasting a rise in the adoption of its systems over traditional electric submersible pumps in the forthcoming years. (Source)

EQT AB has agreed to sell Italian surgical implant manufacturer LimaCorporate to Enovis Corp for approximately €800 million ($850 million), inclusive of debt. The U.S.-based company, specializing in orthopedic bracing, surgical implants, and footcare solutions, will finance the acquisition with €700 million in cash and €100 million in stock. This transaction comes after EQT had considered taking Lima public, as reported in May. The sale to Enovis is anticipated to contribute up to $300 million to Enovis's revenue by 2024 and is expected to generate about $40 million in cost synergies. The deal is part of Enovis's strategy to bolster its reconstructive business and expand globally, while Lima continues to gain recognition for its FDA-approved 3D printing technology used in creating shoulder implants. (Source)

Industry News

BLG Capital, a Turkish private equity firm, is planning to raise up to €250 million ($265.7 million) capitalizing on the revitalized international investment interest in Turkey, attributed to the government’s shift back to conventional economic policies. The fund is primarily aimed at U.S. and European institutional investors and will be channeled into luxury real estate projects including high-end residential and hospitality sectors, as confirmed by CEO Sinan Temo. This move marks BLG’s first Turkey-centered fund since 2015, a period characterized by political unrest and foreign investment drain due to the government's then unconventional economic strategies. The present renewed investor confidence is backed by President Erdogan's endorsement of a more global market-friendly economic team, stabilizing economic indicators, and enhanced relations with the U.S. and EU. Past BLG investments in Turkey include significant projects like the $1.52 billion Galataport and the transformation of the former U.S. consulate into a Soho House & Co Inc branch. (Bloomberg)

Apollo Global Management Inc. is planning to raise about $2.5 billion for a new fund aimed at lending to large corporate borrowers in private markets. This follows the successful deployment of Apollo Origination Partnership Fund I, which closed last year. The move comes amidst a growing trend of large private credit firms accumulating significant funds to enhance their stance in an increasingly competitive corporate market, particularly at a time when traditional banks have receded due to a spike in interest rates and declining investor risk appetite. The new fund, known as AOP II, will contribute to Apollo’s existing $50 billion in assets under direct lending management, continuing its focus on major corporate borrowers primarily in North America and Western Europe, in line with the strategy of its predecessor. (Bloomberg)

The Federal Trade Commission (FTC) has filed a lawsuit against private equity firm Welsh Carson Anderson & Stowe, accusing it of anti-competitive practices related to anesthesiology services in Texas, potentially marking a significant shift in antitrust scrutiny towards private equity. The FTC alleges that the firm, through its 2012 platform U.S. Anesthesia Partners (USAP), engaged in a “multi-year anti-competitive scheme” by acquiring nearly every large anesthesia practice in Texas and forging price-setting agreements with remaining independent providers, leading to increased prices and limited competition. Despite Welsh Carson holding a minority stake in USAP, the FTC asserts it retains control. Welsh Carson disputes the charges, expressing concerns over potential harm to clinicians and patients. The outcome of this case could establish a precedent for future antitrust actions in private equity, particularly concerning healthcare roll-ups. (Axios)

Goldman Sachs' asset management division has successfully closed two funds, amassing over $15 billion to facilitate secondary investments in existing private equity deals. The "Vintage IX" fund raised $14.2 billion, surpassing its $12 billion target, while the inaugural Vintage Infrastructure Partners fund gathered about $1 billion. These funds aim to offer liquidity to investors seeking early exits from their investments, with the possibility of exploring investments in "continuation vehicles," allowing the rolling of older investments into new funds. (Reuters)

Blackstone officially unveiled its new Frankfurt office, a further expansion in Germany, although several partners have been based there since 2021. The firm's growing presence in Europe is also marked by its offices in Hamelin and Mannheim, a well-established Paris office, and a highly selective graduate program. (eFinancial)

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