Stonepeak Partners Acquires $7B Container Giant Textainer, Vista Equity Acquires $4B EngageSmart

Private Equity Insights

Chart of the Week: In our newest private equity case study, we explore 3G Capital's turnaround of Burger King between 2010-2012. During this period, Burger King sold more than 1,000 of its 1,400 company-owned restaurants to franchisees. This move not only brought immediate capital to the company but also reduced operational costs and variability in earnings, resulting in a 49% increase in the company’s adjusted EBITDA. (Read More)

More Insights

• Private Equity Case Study: Burger King (Read More)
• A Key Indicator That Private Equity Exits Will Heat-Up in Early-2024 (Read More)
• Profile of Blackstone’s Private Equity Operations Team (Read More)

Mega Deals

Blackstone and Permira are re-evaluating their planned $12 billion acquisition of the Oslo-based online classifieds platform Adevinta due to a disagreement over price expectations with the company’s special board committee, amidst the company's surging stock value. Adevinta's portfolio spans various countries, including ownership of Leboncoin in France and Mobile.de in Germany. (Source)

CVC Capital Partners is reportedly eyeing a deal with European payments provider Nexi SpA for $8.8 billion. Other buyouts firms are also said to be circling the Italian company, which has seen its stock price fall 75% from its high in 2020. Nexi reported FY revenue of $3.5 billion in 2022 (+7% YoY), and EBITDA of $1.7 billion (+14% YoY). There’s been quite a bit of PE deal activity in Italy recently. Just last week, KKR submitted an offer to acquire Telecom Italia for $24 billion. (Source)

Stonepeak Partners has agreed to acquire container leasing company Textainer Group Holdings in a $7.4 billion take-private deal. The all-cash transaction will offer Textainer shareholders a 46% premium on the recent closing stock price. Textainer is one of the world’s largest container leasing companies, with capacity exceeding 4 million twenty-foot containers. It counts most major global shippers and carriers as customers. Stonepeak’s Senior Managing Director James Wyper says the company offers rare downside protection through economic cycles. (Source)

Vista Equity Partners has agreed to acquire payment software provider EngageSmart for $4 billion. The offer is a 23% premium to when current majority shareholder, General Atlantic, said it was exploring a sale. The company had FY revenue of $304 million in 2022 (+41% YoY), and adjusted EBITDA of $49 million (+58% YoY). (Source)

EQT AB has hired Evercore to initiate the potential sale of Rimes Technologies, which provides data management solutions for large enterprises such as Shell and Bank of New York Mellon. EQT acquired Rimes for an undisclosed amount in 2020, and the company is expected to fetch a valuation near $2.1 billion. (Source)

Other Deal News

Brookfield Infrastructure Partners is in advanced talks to acquire a “large swath” of data centers from Cyxtera Technologies, which is currently in Chapter 11 bankruptcy. Cyxtera has been evaluating its restructuring options, including either a recapitalization with creditor ownership or a complete sell-off. The company had a valuation of $3.4 billion in 2021, but its mounting debt became untenable to manage. (Source) 

Warburg Pincus is assisting data center operator Princeton Digital Group in raising $1 billion in debt to expand its presence in Southeast Asia. The company, which currently operates 21 data centers across China, Singapore, India, Indonesia, Malaysia, and Japan, secured $500 million last year from investors including Warburg Pincus, the Ontario Teachers’ Pension Plan Board, and Abu Dhabi's sovereign wealth fund, Mubadala Investment Co. (Source)

Industry News

Blackstone reported a 12% decline in quarterly profits in Q3 2023 due to smaller fee-related earnings. The firm brought in $16.2 billion of net new capital in Q3, down 50% year-over-year. Blackstone is still sitting on over $200 billion of dry powder and managing over $1 trillion in assets. (Blackstone)

Japan-based private equity firm Integral Corp will reinvest the capital raised in its recent IPO to launch a new $3 billion fund. The asset manager is interested in broadening its investments in real estate and infrastructure. The firm is known for its turnaround of Skylark Airlines which delisted as Tokyo’s third-largest IPO in 2022. (Bloomberg)

Between Disney’s bid of India’s Reliance and Chevron buying Hess, October has panned out to be the busiest month since June 2019 for M&A activity. Although many of the blockbuster deals are mergers, it’s a sign that deal-making is picking up which should give a boost to private equity buyouts and exits. We wrote recently that the average size of private equity exits has increased for two consecutive quarters, a sign that private markets are gaining strength . (Quartz)

Due to changes in economic conditions, private equity firms now primarily depend on the organic growth of their portfolio companies for returns. This shift comes as traditional strategies, including leveraging and multiple arbitrage, have become less viable with rising interest rates and a contracting M&A market. (PitchBook)

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