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Project Deneb

Acquisition Targets – Multi-Sector – Subject to KPI

We are currently working on several ‘live’ briefs for our Client.

They are looking to add to the twelve companies that currently make up their Group and are now benchmarking potential targets for their next phase of planned growth.

Timescales from initial contact to completing in full on deals have been as quick as four weeks, but an average timeframe is four months.

They aim to complete acquisitions before the end of October 2023, have the experience and expertise to support and grow business, can supply evidence of companies they have already acquired and provide proof of funds. Their acquisitions brief focuses on the following:

  • Loss of income and trading profits due to Covid 19 to be added back to the financial accounts
  • Building a group of companies to gain a competitive edge
  • Future profits as a basis for valuation and return on investment
  • Flexible deal structure and handover period to meet your needs
  • Protecting the skills and goodwill that you already have in place

Our role is to identify companies’ suitability based on their brief, protect the confidentiality of both parties, enter first-stage negotiations, and assist their internal acquisitions team in achieving a successful completion.

Contact for further details.

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UK Industrial Cleaning and Food Hygiene Services

Client – Partners in Hygiene Ltd – UK Industrial Cleaning and Food Hygiene Services.

Instruction – Disposal of business to trade or non-trade buyer.

Role – Review market opportunities, benchmark possible share price, and source buyers based on management culture and ethos. Generate sealed bids. Assist German-based buyer in their UK division’s first acquisition. Manage through to Completion.

Result – Successful sale of Company to a non-trade buyer – Leadec Group. 20,000 employees, 300 locations and sales of 900 million euros.

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Buyout of AOL, Yahoo signals PE’s biggest bet on digital media

Apollo Global Management has for years wanted to become a major player in the media world. The firm finally got its wish Monday.

After days of speculation, Apollo has agreed to acquire a 90% stake in Verizon’s portfolio of digital news sites, including Yahoo and AOL, from Verizon for about $5 billion.

The deal marks private equity’s biggest bet yet on the embattled digital media industry, which has struggled to compete with Google and Facebook for a share of the digital advertising market. And it puts Apollo, an investor engulfed in controversy for the past year-plus over co-founder Leon Black’s connections to disgraced financier Jeffrey Epstein, in control of a collection of news sites after spending years betting on legacy media.

“It’s a textbook Apollo deal, They’ve been interested in media space for a while, judging by their past bidding activity. Apollo probably likes the space since many other investors are avoiding it.”

Indeed, Apollo’s history with media companies dates back years. But that history hasn’t always been successful.


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Private equity brushes off past club deal woes with $34B Medline buyout

Private equity’s biggest guns are once again showing they can have record-setting buyout firepower when they work as a team.

After recently backing away from so-called club deals that bring together multiple firms, the industry now has its largest acquisition in years. The Carlyle Group and Hellman & Friedman have joined forces to acquire Medline in a deal reportedly worth around $34 billion, including debt.

The deal comes after US private equity firms amassed approximately $721 billion in dry powder as of June 30, 2020 following years of record fundraising outputs. And it may signal that club deals involving multiple buyout shops have returned after they fell out of favor following a series of high-profile flops.

The Medline deal also marks the largest private equity buyout by value in at least a decade, according to PitchBook data. So far in 2021, private equity firms have struck 13 deals in the US worth $5 billion or more, surpassing last year’s total of 11.


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This day in buyout history: Meals, monopolies and a $7.1B club deal

On July 3, 2007, private equity firms KKR and Clayton, Dubilier and Rice finalized a $7.1 billion acquisition of US Foods, a foodservice powerhouse that traces its roots back to well before the Civil War.

It was a mega-deal inked during the final months before the global economy entered a crisis. So as you might expect, it led to a relationship that involved its fair share of drama—including plans for a headline-grabbing exit that were thwarted by regulatory fears. In the end, KKR and CD&R waited nearly a decade to realize their investments, eventually doing so in one of the largest PE-backed IPOs of 2016.

KKR and CD&R first announced their pending acquisition of US Foods (known at the time as US Foodservice) in May 2007, agreeing to hand over $7.1 billion to purchase the company from Dutch retail giant Royal Ahold, almost twice the price Ahold had paid for the business seven years prior. The two firms were equal partners in the deal.

With annual revenue of more than $19 billion at the time , US Foods was one of the most powerful names in foodservice distribution, which involves supplying ingredients and meals to caterers, cafeterias, restaurants and other entities that sell food directly to hungry customers. The company is an amalgamation of several older provisioners, including Reid, Murdoch & Company, which was founded way back in 1853.

It was mostly a quiet rest of the decade for US Foods. In 2011, though, the business embarked on an add-on spree, acquiring fellow food distributors with a more local focus such as Ritter Food Service, Vesuvio Foods and Midway Produce. The changes continued later in 2011, when US Foodservice officially changed its name to US Foods.

With some inorganic growth complete, KKR and CD&R began searching for an exit. They thought they found it two years later. But government watchdogs had different ideas.

The firms agreed to sell US Foods in December 2013 to Sysco in an eyebrow-raising $8.2 billion deal, with the fellow foodservice giant set to pay $3.5 billion for US Foods’ equity and assume a further $4.7 billion of its rival’s debt. The deal called for US Foods’ prior backers to assume a 13% stake in Sysco, with KKR and CD&R both assuming spots on the newly combined company’s board.

It was a move that would have merged the two largest foodservice distributors in the US. Which, as you might imagine, drew the attention of the US Federal Trade Commission. The FTC filed an objection to the merger in February 2015, more than a year after it was first announced, seeking an injunction against the move on the grounds it would reduce competition and drive up food prices for hospitals, schools and other customers across the country. That June, the companies officially abandoned the planned deal.

And so KKR and CD&R were left looking for another exit route. This time, they opted for a move to the public market. US Foods filed for an IPO in February 2016, and it completed the listing that May, pricing an offering of 44.4 million shares at $23 each to raise $1.02 billion, larger than any other traditional PE-backed public offering in the US that year, according to the PitchBook Platform.

In its early days as a public company, US Foods had a market cap of a little over $5 billion—a far cry from the $7.1 billion price KKR and CD&R had paid nearly 10 years before. In the ensuing three years, however, the company’s valuation has ticked steadily up. As of June 28, the final trading day of 1H, stock in US Foods was trading at $35.76, for a market cap of $7.81 billion.


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Blackstone cashes in on Versace’s $2.1B sale to Michael Kors

From real estate to retail to financial services, Blackstone’s mammoth portfolio of businesses and buildings reaches into about every industry imaginable. But the New York-based buyout firm ventured beyond its extensive comfort zone in 2014, when it paid €210 million (about $287 million at the time) for a 20% stake in luxury fashion brand Versace, valuing the Italian company at €1 billion.

Four-and-a-half years later, the firm founded by Stephen Schwarzman is poised for a nice return on that investment. On Tuesday, fashion brand Michael Kors agreed to purchase Versace for an enterprise value of €1.83 billion, or $2.12 billion, with Blackstone exiting its entire investment as part of the transaction. That price would seem to value Blackstone’s 20% stake at some $424 million.

Stock in Michael Kors (NYSE: KORS) dropped more than 8% Monday, when reports of a deal first emerged, before inching back up 2% on Tuesday. As part of its takeover, the company announced plans to open roughly 100 new Versace stores, increase the brand’s online offerings and expand its reliance on accessories and footwear, all in an effort to grow Versace’s annual revenue from $850 million to upward of $2 billion. Michael Kors, which will be renamed Capri Holdings upon the closing of the transaction, also hopes to shift a portion of Versace’s portfolio away from North and South America and into Asia.

It’s been a good year for Blackstone when it comes to high-profile exits. In June, the firm agreed to sell 15.8 million shares of hotel chain Hilton Worldwide for some $1.3 billion, per Bloomberg. Overall, it’s believed the firm realized about $14 billion in profit from its initial 2007 investment in Hilton, marking what’s reportedly the most profitable exit in private equity history.

That news came a month after the buyout divisions of Blackstone and Goldman Sachs agreed to sell Ipreo, a provider of financial analytics focused on the stock market, to data firm IHS Markit for $1.86 billion. Ipreo’s valuation nearly doubled from when the two firms bought the company for some $975 million in 2014.


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Is Genstar Capital The Next Private Equity Powerhouse?

Predicting the future is a difficult thing, as private equity investors know all too well. But if the recent past is any indication, Genstar Capital could be on the verge of assuming a starring role on the industry’s stage.

First, there’s the fundraising. Genstar closed its latest flagship buyout fund on $3.95 billion last year, which represented a nearly 100% increase from its previous effort, a $2.1 billion pool from 2015. That vehicle was in turn more than 100% larger than its predecessor. If Genstar keeps doubling the size of its funds—which is admittedly a tall proposition—it won’t be long before those vehicles are among the largest in private equity.

And then there are the deals. Genstar completed 24 investments during 1Q, according to PitchBook data, more than any other PE firm in the US. That continues a recent flurry of activity: Genstar has executed nearly 150 transactions since the start of 2016, more than in the previous nine years combined:

What kinds of deals are driving this rapid rise? Who are the firm’s key decision-makers? And where did Genstar come from?

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Saudi wealth fund weighing $1B investment in Tesla rival

After an especially tumultuous couple of weeks for Tesla, Elon Musk’s potential buyout partner is apparently looking to obtain a majority stake in another electric car company.

The Public Investment Fund of Saudi Arabia is considering an investment in Lucid Motors, a Newark, CA-based electric car maker, that could total more than $1 billion and give the fund ownership of the company, according to Reuters.

Under the terms of the agreement, the Saudi Arabian sovereign wealth fund, which manages some $250 billion, would reportedly provide an initial investment of $500 million, then make two subsequent investments if Lucid hits certain production targets.

Founded in 2007 by former Oracle executive Sam Weng and former Tesla vice president Bernard Tse, Lucid is backed by VCs including Venrock and Tsing Capital. Unlike Tesla, the company has yet to release any cars on the open markets. But last year, Lucid unveiled a prototype sedan, Lucid Air, which has 400 horsepower and a starting price of $60,000. The car is expected to ship sometime in 2019.

The potential Saudi Arabia PIF-Lucid partnership could be problematic for Musk, who already appears stressed. Last week, the billionaire entrepreneur gave an interview with The New York Times in which he alternated between laughing and crying while detailing the pressures of running Tesla.

The latest controversy came when Musk himself tweeted earlier this month that he planned to take the business private for $420 per share, or about $72 billion, noting that funding was secured.

Musk later clarified in a blog post that the Saudi Arabia wealth fund, which owns a 5% stake in Tesla, was the potential backer, though no formal agreement had been made. The company is now reportedly facing a subpoena from the SEC and lawsuits from investors that allege Musk’s tweet aimed to inflate the company’s stock price. Tesla stock initially dipped Monday before closing the afternoon up just about 1% at $308.44 per share.


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